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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 account or other investments |
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Equity |
Something you hope to establish with your assets. Increase the value of the amount of assets you own. (Accounts, Home, Car, etc) |
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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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Investments |
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 Account |
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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Principle |
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 of principal amount invested or loaned |
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Stock |
A share of ownership of 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 |
An 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 than money received next year or the year after |
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70/20/10 Rule |
A cash management tool in which 70% of income is spent, 20% is saved, and 10% is invested. |
