Investment and Money Essay

861 WordsMar 17, 20154 Pages
Jaleel Gilliam Ch. 2-04 3/3/15 02.04 Investing Basics Chart Use this chart to take notes from the lesson. Some information has been provided for you, but you can add additional details to those sections. Investing Basics Type of Investment Description—explain what it is and how it works. Level of Risk and Potential Return—explain. Real-life example of this investment (name or company) Minimum investment amount or time? Easy to start or stop investment? Discuss. CD Is an account where a saving note is issued by a bank to a depositor who places funds in savings for a set period. Is a relatively low-risk debt instrument. The potential return is that you reieve a set amount of annual interest on the loan and when the CD contract reaches…show more content…
It’s easy to start but the money is hard to take out because a fee will be charged if you take it out early, and it requires a minimum amount of money in the account. Stocks A share of ownership corporation that represents a claim on a portion of that company’s earnings, and they make the most money over a long period of time. With stocks return is not guaranteed, and you can potentially lose all your money, or even more then you invested if the business fails. You can invest in an infinite amount of stocks such as Apple, Google, Nike, etc. Usually you can't just buy one stock—must invest a minimum dollar amount. For a large company like McDonald's, the high start-up cost deters personal investors ($50,000 in 2012). Bonds Is a debt investment, meaning the purchase of the bond is loaning money to the company or gov for a set period; they have fixed interest rate, meaning the investor knows how much interest will be earned on the loan since the rate will not change. The average returns from bond investments have also been historically lower, if more, stable than average stock market returns. To earn the highest return you have to take higher risk, and to take low risk you will have a low return. 30-Year Treasury Bond—U.S. Department of the Treasury Mutual Funds A pool of funds collected from many investors in order to purchase stocks, bonds, and other investments in greater amount. They require a minimum amount of money to invest, and can earn significantly
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