Terms of the Trade
1) Commission - H
Sales fees charged in return for investment advice and/or the buying and selling of stock.
2) Defined Benefit Pension - G
A retirement plan that promises to pay a certain amount, usually based on the number of years
employed and salary level.
3) Deferred Comp/401K/403B/457 Plan - B
A tax advantaged retirement plan that doesn’t promises to pay a certain amount, the employer
manages the fund and sometimes matches the employee’s contributions. The risk is primarily
delegated to the employee.
4) Index Fund - C
A fund with the goal of replicating the performance of a particular market index. Index funds are
not actively managed. Though their fees are usually lower than actively-managed funds and their
returns are generally greater.
5) No-Load Mutual Fund - J
A commission-free mutual fund.
6) Portfolio - D
All the assets held by a person or entity.
7) Risk - K
The possibility of suffering a financial loss on an investment.
8) Reward - I
A satisfying return or result. A profit.
9) Roth IRA - A
An individual retirement account in which an investor makes contributions using income that has
already been taxed and the money is not taxed when withdrawn after retirement.
10) Stock (Common) - F
A unit of ownership of a public corporation.
11) Bond - L
An arrangement where a corporation or government borrows money and agrees to repay it with
12) Active Management - E
This is an approach to running a mutual fund that includes buying and selling individual stocks.