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125 Cards in this Set

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Government Securities
Securities offered and insured by the federal government, include treasury bills, notes, and bounds
Grace Period (Credit)
Time in which no interest is charged or no late payments are assessed on a credit account
Gross Domestic Product (GDP)
A macroeconomic indicator that calculates the value of goods and services produced throughout a nation
High Quality Corporate Securities
Stocks, bonds, and mutual funds that are issued by companies with a long history of favorable returns and growth
Incentive
Rewards or penalties that encourage choices that help consumers reach their financial and non-financial goals
Income
Payment received as a result of investments, interest, or work
Inflation
A general rise in prices of goods and services that reduces the purchasing power of money
Insurance
A risk management tool that protects an indvidual from financial loss, generally in the form of a policy with premium and/or deductible payments
Interest
The cost of borrowing and lending money:
1. Payment received by an investor from a financial institution as a resutl of an investment or savings.2
A percentage of the loan amount borrowed by a consumer paid back to the lender
Interest Rate
A perecentage of the principle amount that serves as the cost of using that moeny
Investing
Money spent to increase current and/or future income; not insured against loss that rises and falls with the investment market.
Investment Objectives (Mutual Fund)
Categorizes the type of investments that comprise the fund
Law of Demand
Economic governing principle that suggets an inverse relationship exists between demand of a product or service
Law of Supply
Economic governing principle that suggets as cost increases, the quantity supplied to buyers also rises
Lender
An individual, organization, or company that extends credit to a borrower with the expectation that the amount will be paid back over time
Liability/ Liabilities
The dolar value of debts owed to others
Limited Resources
Available resources are inadequate to satisfy all needs and wants
Liquidity
The ease with which an investment can be converted into cash without a loss to principal
Load Fund
A mutual fund that charges a sales commission (load)
Loan Period
Time period in which a loan must be repaid, usually in years
Long Term Goal
Goal that will take more than one year to achieve
Macroeconomics
Study of the economy-at-large including overall income, growth, inflation, and employment rates
Management Fees
Fees charged to mutual fund investors that cover the maintenance and marketing costs of that fund
Market Economy
An economic system where people own and operate businesses
Market Volatility
Fluctuations in the price and value of securities that results in gains and losses of capital
Markets
A meeting place for buyers and sellers to exchange goods and services
Microeconomics
The study of small components of a regional, national, or global economy. Components may include individuals, households, or businesses.
Minimum Monthly Payment
Smallest amount of money accepted by the creditor each billing cycle to keep an account in good standing
Miscellaneous Fees (Credit Accounts)
Additional fees charged a borrower for use of credit inculding late fes, annual fees, over the limit fees, bounced check fees, etc.
Mixed Economy
An economic system that has some aspects of a command economy and some aspects of a market economy
Monetary Policy
National policy set forth by the Federal Reserve System that affects all aspects of moeny, including the availability of money and the cost of credit
Money Market Mutual Fund
A low risk mutual fund that invests in stable, short-term securities
National Association of Securities Dealers (NASD)
A self-regulatory organization that operates and regulates the Nasdaq Stock Market and oversees the activities of the US broker-dealer profession
National Assocation of Securities Dealers Automated Quotation (NASDAQ)
A computerized system that allws brokers to trade stocks electronically
National Association of Securities Dealers Regulators (NASD-R)
The branch of NASD that imposes standards of fair practice on its members and takes disciplinary action against members who violate its rules
National Futures Assocation
A self-regulatory agency for the futures market committed to protecting the rights of investors in the futures market
National Credit Union Association (NCUA)
A federal govenrmeny agency created to guarantee credit union depsosts
Need
Those things that are essental to human existance
Net Asset Value (NAV)
The current market value of a mutual fund's portfolio divided by the nubmer of shares equals NAV/share. Calculated at least one time every business day
Net Worth
A person's financial condition at a given time. Assets (things owned) minuse liabilities (things owned) equals net worth
No-Load Fund (NL)
A mutual fund purchased directly from the fund and does not have a sales charge
New York Stock Exchange (NYSE)
Oldest stock market in the United States that oversees daily trading in over two thousand stocks involoving millions of shares
Annual Percentage Rate (APR)
Yearly interest rate charged on a credit account
Aggressive Growth Securities
Stocks, bonds, and mutual funds that have capital growth as their main objective
Asset
Item owned by an individual or organization that has monetary value
Asset Allocation
Strategy for selecting various investment vehicles in order to spread risk among stocks, bonds, and cash equivalents
Bank
A financial institution that serves as a storehouse of funds for borrowing, lending, selling, and holding
Benefits
Positive outcomes that result from a choice or decision
Blue Sky Laws
State laws that govern the offer and sale of securities to residents of that state.
Bond
Certificate representing loan of moeny for a specific period, in exchange for a promise to repay the amount borrowed with interest by the government or a corporation
Borrower
Individual who uses another's money for current use with a promise to repay that amount from future income or earnings
Capital Gains
At the time of redemption, the value of a security increases from this original purchase price
Capital Loss
At the time of redemption, the value of a security drops from its original purchase price
Cash Advance
Cash received on a credit line at a higher interest rate
Caveat emptor
Latin phrase meaning "Let the buyer beware."
Certificate of Deposit
Saving tool purchased for a specific dollar amount at a fixed interest rate for a specific time period
Choices
Possible alternatives or options; the best option under a given circumstance
Collectibles
Physical objects such as fine art, stamps, antiques that are purchased as an investment
Command Economy
An economic system in which all decisions concerning production of goods and services are made by the government and all resources are owned by the government
Commission
Broker or agent fee for carrying out a transaction
Commodity Futures Trading Commission
Regulatory organization for future contracts and commodities
Compound Interst
Interest earned on principal plus previously accrued interst
Consumer
An individual who buys or uses products or resources
Costs (decision making)
Negative outcomes that result from a decision
Credit
Borrowing money now with a promise to pay it back at a later time, generally with interest
Credit Limit
The maximum amount of credit available on a credit account
Decision
A chouce made from available options
Decision Making
Process used to determine the best possible choice at a given time based on available information and resources
Demand
The quantity of goods consumers purchase in a given time period.
Discount Broker
Financial professional who executes securities transactions with little or no individual advicre and therefore charges a low commission.
Diversification
Strategy for reducing risk by spreading investment money among several investment types and industries
Dividend
Earnings on stock paid to shareholders by corporations
Dollar-Cost Averaging
Investing the asme fixed dollar amoutn in the same investment at regular invtervals over a long period of time regardless of price
Dow Joans Industrial Average (DJIA)
A market indicator that averages blue chip US stocks in different categories
Economic Growth
A time of gerneal rise in a regiouns economy. During economic growth, more goods and services are produced, more jobs are created, and income levels rise
Economic Indicators
Regularly reported statistics that evaluate business conditions and economic trends. Some of these statistics include employment, stock prices, money supply, and consumer confidence
Economics
The study of management, distribution, and consumption of goods and services
Economy
A system of regulations and rules by which a country's productio nand consumption activity are managed
Employer-Sponsered Retirement Plan
A saving/investment plan approved by the Internal Revenue Service (IRS) that allows an individual to place funds in a tax-sheltered accoutn for the purpose of funding all or part of one's retirement
Entrepreneur
Individual who establishes, maintains, and assumes the rsik of a business operation
Ethics
Beliefs that govern an individual or community's actions
Exchange
Central location where buyers and sellers unite to execute transactions
Expense
An outflow of money
FDIC (Federal Deposit Insurance Corporation)
Agency of the federal government created to guarantee bank deposits
Federal Reserve System (Fed)
Sets forth economic policies that effect the nation as a whole. The Fed maintains accounts for government accounts for government agencies, regulates the buying and selling of government securities, lends money to banks, monitors and audits banks, control the circulatio nof money, and many other tasks
Financial Advisor
A professional who provides financial information and advice. May include an employee benefits staff member, credit counselor, bank employee, broker, financial planner, accountant, insurance agent or attorney
Financial Institution
Entities that provide financial services. Usually refers to banks, credit unions, brokerage houses, savings, and loan institutions
Financial Market
Markets consisting of exchanges that serve as a central location where buyers and sellers get together in person, by telephone, or by computer terminal to trade stocks, bonds, commodities, options, futures contracts, and other securities
Financial Plan
A systematic course of action for identifying financial goals, figuring net worth, estimating income and expenses, and using credit wisely.
Fraud
The use of intentional misrepresentation of truth for illegal gain
Free Enterprise System
An economic system that allows anyone to start a business provided they have the resources to do so.
Opportunity Cost
The next most valued alternatives tha twill be given up as a result of choosing another option
Over the Limit Fee
Charge for exceeding the credit line on an account
Pay Yourself First
An established amount saved each payday and put into savings rather than immediately spending the money
Ponzi Scheme
An illegal investment scam named for its inventor, Charles Ponzi.
Portfolio
Collection of investments held by an individual or organization
Private Company
A company owned exclusively by an individual, family, or small group of people.
Price
Monetary value at which a good or service is bought or sold
Prospectus
Legal document that details an investment company, including fund operations, investment objectives, fees, and earnings record
Public Company
A corporation that sells shares of ownership in the company to the general public
Pyramid Scheme
Fraudulent scheme where an investor buys the right to be a sales representative for a "product." Those in the scheme early may profit; those in late always lose.
Real Estate
Phsyical property owned for the purpose of investment, including rental property, personal property, or business property.
Return
Total increase or decrease of an investment; includes income plus capital gains or minus capital losses.
Risk (investment)
The possibility that an investment will lose value
Risk/ Return Relationship
Assumption that greater uncertainty equates higher gain and that less uncertainty equates lower gain on an investment.
Role of Government
Parameters established for the government to take action and intervene for the common good of its citizens
Savings
Income withheld from current spending for future use.
Savings Account
Account used to set aside income for easy withdrawal and to accrue interest
Scarcity, Scarce
Condition in which resources are insufficient to fulfill consumer wants.
Securities and Exchange Commission (SEC)
Independent federal agency that governs the securities industry and enforces securities laws.
Short-Term Goal
Goal that will be achieved within one year.
Simple Interest
A percentage of the principal amount only.
State Securities Regulator
Government officer who handles the licensing, registration, and regulation of stockbrokers and financial advisors that do business in a specified state.
Stock
An investment that represents shares of ownership and entitles the investor to a portion of the company earnings
Stockbroker
A financial representative who handles the buying and selling of securities.
Stock Market
Market in which sellers of stock trade shares with buyers of stock.
Stock Symbol
Abbreviation of a comany name; used to simplify reporting on stock reports (also called ticker symbol or stock abbreviation).
Supply
The amount of products or services that a producer is able to make available to consumers at a given time.
Swindler
Individual who engages in fraudulent practices for illegal gain.
Tax-Deferred
Deposits made to an account are taxed upon withdrawal.
Time Value of Money
Concept that an initial investment made early in life will accrue more interest thatn a series of deposits made later in life (due to compounding, time, rate of interest and amount invested).
Trade-Off
Something foregone by choosing one option over another.
Transaction Costs (Investment)
Fee charged by a broker to buy or sell investment products.
Values
Concepts important to an individual that provide a foundation upon which decisions are made.
Want
Things that are not necessary for sustaining life but that make one's life more comfortable