| A | B |
|---|
| NYSE | Largest stock exchange in the U.S. |
| budget/savings and spending plan | a list of monthly expenses and income and what will be put aside for the future |
| Advantages of Regular Savings Accounts | very safe, guaranteed by FDIC insurance, liquid, no or very small minimum balance, |
| Disadvantages of Regular Savings Account | very low interest rate, depositor may be charged a fee if balance drops below a certain level |
| Advantages of Money Market Savings Account | fairly liquid, higher interest rate than regular savings account, |
| Disadvantages of Money Market Savings Account | low interest rates compared to other savings vehicles, may have restrictions on how often you can access your money |
| Advantages of CD's | higher interest rates than other savings vehicles, constant interest rate usually |
| Disadvantages of CD's | money must stay in account for a certain amount of time (not as liquid), penalty for withdrawing money early, usually a minimum amount to start it |
| Advantage of Savings Bonds | low risk, guaranteed by U.S. Government, can earn additional interest, buy at 1/2 the face value |
| Disadvantage of Savings Bonds | not as liquid, low interest rates--comparable to savings accounts |
| savings bond | a kind of loan from a buyer to the government that is guaranteed--a popular savings vehicle--although it offers very low interest rates |
| When people invest | they exchange their money for something else/they hope to make a profit/they make a tradeoff |
| Credit Cardholders Bill of Rights | law passed in 2009 to help protect credit cardholders |
| venture capital | is money invested in entrepreneurial enterprises/helps entrepreneurs fund their new idea or business/is a form or real investment |
| capital gain | when a stock is sold at a price higher than what it was bought for |
| capital loss | when a stock is sold at a price lower than what it was bought for |
| the savings rate | usually determines the health of the economy |
| commodity | a physical substance such as food, grains, metals, which investors buy or sell through futures contracts |
| SEC | Securities and Exchange Commission--a government agency that regulates the trading of stock and safeguards against fraud |
| bull market | when the Dow Jones Industrial Average steadily rises over a period of time |
| bear market | when the Dow Jones Industrial Average steadily falls over a period of time |
| retirement plan | a plan as to how an individual might be able to pay their expenses when they are no longer working at a job. 401K, 403B, IRA are examples of items that might be part of this plan |
| investment plan | a plan as to how an individual might use their income to allow for financial growth--diversity is a key part of this plan--stocks, bonds, mutual funds, gold |
| Popular stocks in the Dow Jones Industrial Average | IBM, Disney, Walmart, McDonalds |
| mutual fund | many people invest in a diversified group of investments--stocks, bonds, etc., in a variety of companies to spread out their risk--has a manager to safeguard the fund |
| Investing always involves | risk |
| 5 Reasons why People Save | major purchases, large bills, unexpected expenses, long-term expenses, amass wealth |
| stock split | when the price of a stock gets very high--the Board of Directors may initiate this--usually the price of the stock rises afterward |
| Three Credit Bureaus | TransUnion, Equifax, Experian |
| Credit history, ability to pay, available assets | Factors that can determine if a person's credit rating is high or low |
| Things to do if you get in trouble with too much debt | Credit Counseling, Bankruptcy--last resort |
| When you buy stock in a corporation | you are an owner of the corporation |
| If you pay off your credit card bill each month when you receive the bill | you won't have a finance charge to pay on your purchases |
| disposable income | money available after taxes have been paid--you could save it, spend it, invest it |
| liquidity | the ability to convert an asset into cash fairly quickly and easily |
| infrastructure | a nation's bridges, road, airports, schools |
| installments | the equal amounts into which repayment of a loan is divided |
| diversification | choosing a variety of investments |
| usury | the charging of interest above the limit set by the law--it's illegal |
| credit bureau | a business that specializes in collecting financial information about consumers--there are three of them! |
| oil, coal, soybeans, pork bellies | examples of commodities |
| repossession | when the lender takes possession of the collateral if the loan isn't repaid |
| credit rating | the estimation of the probability or repayment--the higher it is than better credit risk the person is |
| bankruptcy | legally declaring that you are unable to pay your debts |
| collateral | something of value offered by the borrower as a guarantee the loan will be repaid |
