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timer Asked: Feb 26th, 2016

Question description

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.


Is a time deposit, a financial product. CDs are similar to savings accounts in that they are insured and thus virtually risk free; they are "money in the bank".

Usually a low-risk because they are insured.

CD-Ally Bank

CD’s require a mininum amount of money to invest. They hard to stop because you have to pay a fee if before a time you set.


Individual Retirement Account (IRA)—a portion of a person's income is set aside to be withdrawn after retirement, growing interest in the meantime through investment in other securities. Employers might contribute to the account as a benefit to employees.

Varying risk levels because of who is in charge.

Charles Schwab

There is no minimum to deposit but a limit on how much money could be deposited. JUst like Cd’s if you want to stop before time is up the bank will take a fee.


is an interest-bearing account that typically pays a higher interest rate than a savings account, and which provides the account holder with limited check.


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).


30-Year Treasury Bond—U.S. Department of the Treasury

Mutual Funds


High (Aggressive)—Have a potentially large return relative to other investments but also are considered the riskiest.

Traditional Bank Account

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