Risk vs. Returns

Risk vs. Returns

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Term Definition
Asset Class 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.
Money Market A mutual fund or account that invests in short-term, liquid investments.
Mutual Fund A mutual fund is 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. 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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