Finance Class Harrison Midterm

Front 1

Explain the difference between present value and future value of a single deposit.

Back 1

what it is worth today vs. what it is worth later

Front 2

Liquidity

Back 2

the degree at which an asset can be sold

Front 3

the six steps of financial planning

Back 3

1. assess situation 2. identify goals 3. financial plan 4 design plan 5. execute plan 6 review

Front 4

the career decision process

Back 4

find ways to get into jobs related to your interests

Front 5

effective strategies for obtaining employment

Back 5

know yourself and what you're good at, match your skills with your career choice, cold call (go right to businesses and ask for jobs), search for jobs that haven't been advertised yet, NETWORK (talk to friends, relatives), try temp jobs to get in the door

Front 6

a resume

Back 6

a paper explaining past education and work experiences

Front 7

a cover letter

Back 7

a letter sent to your boss before your resume to explain why you're interested in the position

Front 8

an internship

Back 8

a paid or an unpaid position in a career that might be of interest to you.

Front 9

what is the key to getting hired?

Back 9

be interested in something, be confident about your skills, be honest, go out and asking for the job

Front 10

Considerations before accepting a job offer

Back 10

the pay and benefits, location of business (ie near family), if the job interests you, costs of living in the job area

Front 11

what is the relationship between your financial documents an achieving your money management goals

Back 11

you must manage and track your income and make plans for the financial goals you want to achieve. (ie. save a certain amount of money each month to put towards a mortgage for a house

Front 12

What are assets?

Back 12

possessions of value (house, car, jewelry)

Front 13

what are liabilities?

Back 13

debt to be repaid (student loans, mortgage, car loan)

Front 14

the difference between salary and take home pay

Back 14

salary is a set payment
Salary minus taxes equals your take home pay

Front 15

budget and budget variance

Back 15

Writing a budget is anticipating how much something will cost and setting aside the money to pay for it before you buy it. (ie I have a $200 budget for food each week.)

A budget variance is the difference between the budget and what you actually spend.
(ie an unfavorable budget variance would be if I spent $300 on my food this week.
a favorable budget variance would be if I spend $180 on my food budget this week

Front 16

factors that influence your buying decisions

Back 16

variables (that's what you wrote harrison. I'm thinking its wrong) try the below instead:

do I have enough money,
are my friends buying it
what do I think of it when I first see it
do I need it

Front 17

a cooperative

Back 17

A cooperative business belongs to the people who use it—people who have organized to provide themselves with the goods and services they need.
(there are farm cooperatives in Montclair. Farmers that want to sell their products form cooperatives to get their food sold.) In a cooperative, those with similar needs act together and pool their resources for mutual gain. But the returns are not just monetary. Members ensure that their cooperative business provides the best quality products and services at the lowest possible cost.

Front 18

arbitration

Back 18

a way to resolve disputes outside of the courts

Front 19

mediation

Back 19

a way of fixing your spending habits (?)

A way of resolving disputes between two or more parties. A mediator assists the parties to negotiate a settlement rather than go to the courts. this is a cheap private method that gives both parties more control than if they were in the court system.

Front 20

compound interest and its affect on savings an credit accounts

Back 20

you gather more money overtime.

Front 21

debit card

Back 21

takes money straight out of your bank account

Front 22

a certificate of deposit (CD)

Back 22

Virtually risk free. A financial saving account that is insured by the government. You agree to keep your money in the bank for a set period at a set interest. After the set period is over you can withdraw your money and interest.

Front 23

bank reconciliation

Back 23

compares check register to bank checking account

Front 24

the five C's of Credit

Back 24

Character
Capacity
Capital
Credit
Collateral

Front 25

Co-sign a loan?

Back 25

2 owners of a loan. If the primary owner of the loan doesn't pay it off, the secondary owner is then obligated to pay it.

Front 26

The two types of bankruptcy and their difference

Back 26

Chapter 7 - straight bankruptcy or liquidation of your assets (sell car, house). You ruin your credit but it can help you out if you are overwhelmed by debt
chapter 13 - when you can pay a portion of your debts but not all of them. You can keep your house with this method or keep your car.

Front 27

Collateral

Back 27

Used to secure a loan (property)

Front 28

closed end credit

Back 28

Closed-end credit is a type of credit that should be repaid in full amount by the end of the term, by a specified date.

Front 29

opened end credit

Back 29

Open end credit is when a borrower can continue to borrow and pay off in various amounts, such as a credit card.

Front 30

a mortgage

Back 30

A loan to finance the purchase of real estate, usually with specified payment periods and interest rates. The borrower gives the lender a lien on the property as collateral for the loan.

Front 31

the benefits to renting

Back 31

you don't have to fix the building. If you want to move you can just wait for the end of your lease to move, you don't have to put it up for sale.

Front 32

Points on a mortgage

Back 32

Mortgage points describe certain charges to be paid in order to obtain a mortgage on a home. Each mortgage point is a fee based on one percent of the total amount of the loan. The points you pay are based on the interest you pay on your mortgage. The greater the interest rate, the fewer the points. (ask dad!)

Front 33

Equity

Back 33

the value of an ownership interest in property, including shareholders' equity in a business

Front 34

tax exempt income

Back 34

income you pay no taxes on

Front 35

tax deferred income

Back 35

Any income that one earns but does not receive until a later date, resulting in a situation in which taxes on the income are not paid until later.

ie. money you don't receive until you retire or money in bonds you buy

Front 36

stock ownership in a company

Back 36

ownership of a company
In the majority of the cases you own a small portion of the company. You have no real power in the company unless you own a majority of the shares of stock.

Front 37

common stock

Back 37

It is called "common" to distinguish it from preferred stock. If both types of stock exist, common stock holders cannot be paid dividends until all preferred stock dividends (including payments in arrears) are paid in full.

In the event of bankruptcy, common stock investors receive any remaining funds AFTER(!) bondholders, creditors (including employees), and preferred stock holders are paid. As such, such investors often receive absolutely nothing after a bankruptcy.

Front 38

preferred stock

Back 38

can get dividends, get paid back immediately

Preferred stock usually carries no voting rights, but may carry a dividend and may HAVE PRIORITY over common stock in the payment of dividends and upon liquidation.

Front 39

a bond

Back 39

instrument of debt

Front 40

a mutual fund

Back 40

A mutual fund is a type of professionally managed collective investment that pools money from many investors to purchase securities.

Front 41

an IPO

Back 41

initial public offering

Front 42

Bull Market

Back 42

Prices rise

Front 43

Bear Market

Back 43

Prices Fall

Front 44

A REIT (Real Estate Investment Trust)

Back 44

This is what dad does! He buys and sells big pieces of real estate for his company!

a real estate investment trust (REIT) is "any corporation, that acts as an investment agent specializing in real estate and real estate mortgages"

Front 45

Collectables you can use for an investment

Back 45

real estate, cars, metals, jewels

Front 46

a syndicate

Back 46

group of investors on a single project

Front 47

a W4 form

Back 47

a statement of deduction

Front 48

W2 statement

Back 48

A W-2 form is a statement that must be prepared by employers each year for employees, showing the employee's total gross earnings, Social Security earnings, and federal and state taxes withheld for the employee.

Front 49

Gross Income

Back 49

Amount of money you made from work

Front 50

adjusted gross income

Back 50

The amount of money you made from work minus your deductions. (Say you need an ice cream truck to sell ice cream for your job. The cost of your ice cream truck and gas would be deductions) So you made $100, the car lease cost you $40, the gas $5. Your AGI would be 100-40-5= $55 You would then be taxed on the $55 not the $100

Front 51

Insurance premium

Back 51

money charged for coverage. You need coverage or protection in case of emergency.

Front 52

an insurance policy

Back 52

protects against loss

Front 53

liability insurance

Back 53

protects you financially in case you damage other peoples stuff

Front 54

automobile collision insurance

Back 54

protects you financially and can pay to fix your car. If you are responsible for the accident it will also pay and protect you against the bills of the other party.