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43 Cards in this Set
- Front
- Back
stock
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partial ownership of a company
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bond
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a loan, corporate bond= a loan to a corporation
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mutual funs
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people invest in these and managers pool all of the money together to invest in a pool of stocks
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NYSE
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New York Stock Exchange, oldest and most established place where stocks are traded
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NASDAQ
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largest stock market in America, all done over computers, technology heavy
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S & P 500
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index of largest 500 companies that are traded
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growth stocks
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high P.E. ratio, >40
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value stocks
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low P.E. ratio, 15<
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beta
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measurement of volatility
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P/E ratio
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price per share/earnings per share, (high/low=high, expensive and low/high=low, cheap) market expectations of the future of a company.
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par value (bond)
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amount of the loan
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coupon
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percentage you get back each year (interest)
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bond rating
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AAA=treasury, investment grade, junk bonds= CCC-D= high risk, high return
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yield
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annual percentage return on your investment
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premium/discount bond
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bond is being sold at a lower value than its par value/ bond is being sold at higher than its par value
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dividends
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amount of money a company pays its stock holders
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broker
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stock agent
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munis
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municipal bond, a bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks and schools
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commodities
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products that are the same no matter who produces it, such as petroleum, notebook paper or milk
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capital gain
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the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the seller
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bull/bear market
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steady rise in stock market price/steady drop in stock market price
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futures contract
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a contract to buy or sell at a specific date in the future at a price specified today
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Three Key Economic Questions
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-What goods and services should be produced?
-How should these goods and services be produced? -Who consumes these goods and services? |
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trade-off
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an alternative we sacrifice when we make a decision
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traditional economy
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economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services
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market economy
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economic system in which decision on production and consumption of goods and services are based on voluntary exchange in markets
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centrally planned economy
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economic system in which the central government makese all decisions on the production and comsumption of goods and services
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production possibility frontier
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the line on a production possibilities graph that shows the maximum possible output for a specific economy
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equilibrium price
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the price of a good at which the quantity demanded and the quantity supplied are eqaul
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supply
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the amount of goods available
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demand
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the desire to own something and the ability to pay for it
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unitary elastic
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describes demand whose elasticity is exactly equal to 1
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shift in demand
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-income
-consumer expectations -population -consumer tastes and advertising -prices of related goods (complements and substitutes) |
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shift in supply
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-change in production costs
-change in technology -government policy -natural disaster |
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shortage
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when less than enough of a good is produced
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surplus
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when more than enough of a good is produced
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complements
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two goods that are bought together
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substitutes
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goods used in place of one another
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economic efficiency
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making the most of resources
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economic freedom
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freedom from government intervention in the production and distribution of goods and services
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economic security
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assurance that goods and services will be available, payments will be made on time, and a safety net will protect individuals in times of economic disaster
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economic equity
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fair distribution of wealth
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economic growth and innovation
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innovation leads to economic growth, and economic growth leads to a higher standard of living
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