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26 Cards in this Set
- Front
- Back
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Annuity |
A situation in which there are equal cash flows occurring at equal intervals for a fixed period of time |
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Bonds |
A promissory note to repay a certain amount of money at some future point |
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Capital Gain |
Taxable income that occurs when an asset is sold for more than it originally cost |
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Compound Interest |
Interest earned on interest added to an account |
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Diversification |
The process of investing in multiple investments to minimize risks |
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Dividends |
The distribution of cash to shareholders |
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Earned Interest |
The amount of money earned on interest bearing accounts of other investments |
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Equity |
Ownership in something |
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Individual Retirement Account (IRA) |
A type of savings account created by the government to encourage people to save for retirement |
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Inflation |
The increased cost of living |
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Interest |
The price a borrower pays a creditor for the use of money over a period of time |
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Investment |
Something acquired with the goal of making money |
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Investment Risk |
The uncertainty of the return on an investment |
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Market Value |
The current quoted price at which investors buy or sell a share of common stock or a bond at a given time |
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Money Market |
A type of deposit account that has features of a checking and savings account |
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Mutual Fund |
Sells shares to investors in order to collect a pool of money that is then used to buy various investments |
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Personal Risk |
Exposure to the chance of loss |
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Principal |
The total amount of money originally invested or loaned |
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Rate of Return |
The gain or loss on an investment over a specified period of time |
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Rule of 72 |
The amount of time it takes for money to double in value |
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Simple interest |
Interest earned only on the original amount or principal amount invested or loaned |
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Stock |
A share of ownership in a company |
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Stockholder |
An individual, group, or organization that holds one or more shares in a company |
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Stockbroker |
Agent that charges a fee or commission for executing buy and sell orders submitted by an investor |
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Time value of money |
Refers to the fact that money received today is worth more at a later date |
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70/20/10 |
Cash management tool in which 70% should be spent, 20% saved, and 10% invested |
