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54 Cards in this Set
- Front
- Back
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Saving |
The absence of spending |
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Savings |
The dollars that become available when people abstain from consumption |
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Financial system |
A network of savers, investors, and financial institutions that work together to transfer savings to investors |
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Certificate of deposit |
A receipt showing that an investor has made an interest-bearing loan to a bank |
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Financial assets |
Claims on the property and the income of the borrower |
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Financial intermediaries |
Financial institutions that lend the funds that savers provide to borrowers |
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Finance company |
A firm that specializes in making loans directly to consumers and in buying installment contracts from merchants who sell goods on credit |
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Bill consolidation loans |
A loan consumers use to pay off other bills |
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Premium |
The price the insured pays for this policy and is usually paid monthly, quarterly, or annually for the length of the protection |
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Mutual fund |
A company that sells stock in itself to individual investors and then invests the money it receives in stocks and bonds issued by other corporations |
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Pension |
A regular payment intended to provide income security to someone who has worked a certain number of years, reached a certain age, or suffered a certain kind of injury |
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Pension fund |
A fun set up to collect income and disperse payments to those persons eligible for retirement, old age, or disability benefits |
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Risk |
A situation in which the outcome is not certain, but probabilities for each possible outcome can be estimated |
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401(k) plan |
A tax-deferred investment and savings plan that acts as a personal pension fund for employees |
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Coupon |
The stated interest on the debt |
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Maturity |
The life of a bond |
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Municipal bonds |
Bonds issued by state and local governments |
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Tax exempt |
The federal government does not tax the interest paid to investors |
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Savings bonds |
Low denomination, non-transferable bonds issued by the US government, usually through payroll savings plans |
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Individual Retirement Accounts |
Long term, tax sheltered time deposits that an employee can set up as part of a retirement plan |
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Capital market |
A market where money is loaned for more than one year |
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Money market |
A market where money is loaned for periods of less than one year |
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Equities |
Stocks that represent ownership shares in corporations |
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Portfolio diversification |
The practice of holding a large number of different stocks so that increases in some can offset unexpected declines and others |
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Stockbroker |
The person who buys or sells equities for clients |
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Security exchanges |
Places were buyers and sellers meet to trade securities |
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Dow-James Industrial Average |
The most popular and widely publicized measure of stock performance on the NYSE |
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Standard & Poor's 500 |
Popular benchmark of stock performance that uses the price changes of 500 representative stocks as an indicator of overall market performance |
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Bull market |
A "strong" market with the prices moving up for several months or years in a row |
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Bear market |
A "mean" market with the prices of equities following shortly for several months or years in a row |
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Options |
Contracts to provide the right to purchase or so commodities or financial assets at some point in the future at a price agreed upon today |
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1 Relationship between risk and return 2 personal investment goals 3 consistency of investment 4 simplicity |
Factors to think about when investing in financial assets |
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1. Moody's 2. Standard & poor's |
What 2 companies rate bond quality |
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1. Moody's 2. Standard & poor's |
What 2 companies rate bond quality |
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AAA |
The best rating |
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1 finance companies 2. Life insurance 3. Mutual fund 4. Pension fund 5. Real estate investment trust |
Types of nonbank financial institutions |
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1 finance companies 2. Life insurance 3. Mutual fund 4. Pension fund 5. Real estate investment trust |
Types of nonbank financial institutions |
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Save, borrow, saved money, goods and services, build new plants, create new jobs |
The money that people _____ in banks can be used by other people who ______ the money. Businesses borrow _________ for many purposes. They use it to provide ________, ________ , and ________. Without savings, no _______ would be available |
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1 finance companies 2. Life insurance 3. Mutual fund 4. Pension fund 5. Real estate investment trust |
Types of nonbank financial institutions |
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Save, borrow, saved money, goods and services, build new plants, create new jobs, capital |
The money that people _____ in banks can be used by other people who ______ the money. Businesses borrow _________ for many purposes. They use it to provide ________, ________ , and ________. Without savings, no _______ would be available |
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1 finance companies 2. Life insurance 3. Mutual fund 4. Pension fund 5. Real estate investment trust |
Types of nonbank financial institutions |
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Save, borrow, saved money, goods and services, build new plants, create new jobs, capital |
The money that people _____ in banks can be used by other people who ______ the money. Businesses borrow _________ for many purposes. They use it to provide ________, ________ , and ________. Without savings, no _______ would be available |
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Savers, investors, financial institutions |
A financial system provides a way of moving funds among ______, ______, and _______. |
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1 finance companies 2. Life insurance 3. Mutual fund 4. Pension fund 5. Real estate investment trust |
Types of nonbank financial institutions |
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Save, borrow, saved money, goods and services, build new plants, create new jobs, capital |
The money that people _____ in banks can be used by other people who ______ the money. Businesses borrow _________ for many purposes. They use it to provide ________, ________ , and ________. Without savings, no _______ would be available |
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Savers, investors, financial institutions |
A financial system provides a way of moving funds among ______, ______, and _______. |
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Households, businesses, governments, businesses |
____ and ____ are the most important savers. _____ and ____ are the largest borrowers |
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Securities exchange |
A _______ is a place where stocks are bought and sold |
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Securities exchange |
A _______ is a place where stocks are bought and sold |
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1 certificates of deposit 2 corporate bonds 3 municipal bonds 4 government savings bonds 5 treasury notes and bonds 6 treasury bills t-bills 7 individual retirement accounts (iras) |
Different kinds of financial assets 7 |
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1 NY stock exchange 2 American stock exchange 3 regional stock exchanges 4 global stock exchanges |
Different types of stock exchanges 4 |
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1 NY stock exchange 2 American stock exchange 3 regional stock exchanges 4 global stock exchanges |
Different types of stock exchanges 4 |
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Over-the-counter market (OTC) NASDAQ |
Most stocks in the United States are traded electronically on the _______. The The most important OTC market is the national Association of securities dealers automated quotation, or _____, which lists the stock prices and activities of over 4000 companies. |
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1. Dow-Jones Industrial Average 2. Standard & Poor's 500 |
Two main ways of knowing how the market is doing |
