Risk vs. Return

Risk vs. Return

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Term Definition
Asset Class Separate types of investments.
Dividend Money paid by a corporation to each shareholder.
Money Market A mutual fund or account that invests in short-term, liquid investments.
Mutual Fund A pool of stocks, bonds, and other securities managed by an investment company.
Rate of Return The annual amount of money an investment makes, given as a percentage.
Risk The chance that an investment may lose value.
Return Monetary increase in an investment.

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Risk vs Return

Term Definition
AssetClass Separate types of investments, such as stocks/stock mutual funds, bonds/bond funds, money market accounts, and international stocks/international stock funds.
Dividend Money paid by a corporation to each shareholder. Typically paid four times a year, these distributions of company profits can be used to reinvest in more shares of the company.
MoneyMarket A mutual fund or account that invests in short-term, liquid investments. These funds generally pay better than a savings account with a bank but less than a typical stock mutual fund. These funds are considered very low risk.
MutualFund A mutual fund is a pool of stocks, bonds, and other securities managed by an investment company. Individuals can buy shares of the fund and profit from its investment gains
RateOfReturn The annual amount of money an investment makes, given as a percentage.
Risk The chance that an investment may lose value. Less-risky investments have a lower rate of return.
Return Monetary increase in an investment. If an investment loses value, it is called a negative return.

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