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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 money 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 |
ownership in something. business, account, home, car |
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individual retirement account |
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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investment |
something acquired with the goal of making money. stocks, bonds, mutual funds, savings |
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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 |
-maintain a minimum balance -no maturity date -pays interest -limited check writing privileges -a type of deposit account that has features of a checking account and savings account |
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mutual fund |
sells shares to investors in order to collect a pool of money that of then used to buy various investments |
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personal risk |
exposure to the chance of loss. |
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principal |
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 or principal amount invested or loaned. |
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Stock |
a share of ownership in a company. |
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stockholder |
an individual, group, or organization tat 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 total in which 70% of income is spent, 20 saved and 10 invested. |
