Learning Target: IWBAT describe the risk and return of various investment vehicles and the importance of diversification.

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Learning Target: IWBAT describe the risk and return of various investment vehicles and the importance of diversification

 Return on Investment Return on Investment  When is a time that you have received a good return on investment? Remember that you can invest more than just money….

 Savings Account: account that pays interest, has no maturity date, and from which funds can be withdrawn at any time without penalty  Certificates of Deposit (CD): time deposits that state the amount of deposit, maturity, and rate of interest being paid  Stocks: share of ownership in a corporation that entitles the buyer to a certain part of the future profits and assets of the corporation  Bonds: investment in which an investor loans money to an entity that borrows the funds for a defined period of time at a fixed interest rate  Mutual Funds: investment company that pools the funds of many individuals to buy stocks, bonds, or other investments  Individual Retirement Accounts (IRA): private retirement plan that allows individuals or married couples to save a certain amount of untaxed earnings per year with the interest being tax-deferred  401k: defined contribution plan where an employee can make contributions from his or her paycheck either before or after-tax  Pension Plan: company plans that provide retirement income for their workers

 Textbook Pages:  Suze Orman Video 1 Suze Orman Video 1  Suze Orman Video 2 Suze Orman Video 2

 Based on what you learned in class today, what do you think is the best retirement option for you?  Explain your answer