Short Answer Business 101

Name 4 factors to use when evaluating your investment choices

1. liquidity 2. degree of safety 3. dividends 4. growth

describe the five c's of credit

1.collateral 2.capital 3.capacity 4.conditions 5.character

What is APY? Why are financial institution required to inform consumers of the APY on their accounts? how is it used?

APY is your annual percentage yield; actual interest rate payed based on yearly compounds; it can help compare institutions

What is a personal property inventory? what should you include in a personal property inventory? why is such a document useful?

a list of all your assets and anything you own of value. you should include the item, when it was purchased, a picture, the cost, and the current value. this document is useful if anything happens to you, you have a list of all your belongings.

What is a checking account? Describe several advantages of a checking account.

an account tied to a debit card, allows you to write checks and pay bills; money is accessible and can be easily taken out, it is safer, and it also records spending patterns

What is a put and take account?

an emergency fund, often used as the first stage of investing

How can you obtain a copy of your credit report? How much does this typically cost?

free once a year from credit burea; typically costs around 5 to 15$

What is the most common type of credit card fraud? How can you avoid this happening to you?

identity theft, stolen cards. Report it stolen, only use secure websites, protective coverings, never give out personal information to not secure sources

What is systematic investing? What are the typical goals of systematic investing? When do most people begin this stage of investment?

investing on a regular basis, it is planned, and the goal is to set money aside each month to eventually save money. this is a long term investment

Which is riskier for an investor an undervalued stock or an overvalued stock? why? Which is riskier for a business?

investor: overvalued because you are paying more then its worth and not getting it back; yet for a business undervalued stock is riskier because you would under value the company, showing you are unsure and unprofessional

What is the first step in financial planning?

know all the financial needs, expenses, and the source of income

Do customers have more or less leverage with businesses when using credit?

more leverage, they have a credit card company in between to withhold payment if necessary

Discuss a variety of way a consumer can stay informed about products and services before buying.

online, better business bureau, consumer reports, check with people who have purchased the product

Explain how a business's cost of providing credit impacts how much consumers pay for the use of credit.

paying a charge and sending out statements end up costing consumers making them inherit higher payments.

Explain how the use of credit helped increase the average American' standard of living in the 20th century.

people were buying more expensive things with credit and improved the economy. also buying more than they needed, and were excessively spending more money than they were making.

what is an economic system? describe the three major types

process where countries answer what? how? and whom? the three major types are mixed marked, communistic, socialistic (hands on, compromise, hands off)

What is the final step of the decision-making process? Why is this step necessary?

re-evaluating your decision and choices, it is necessary to make sure that you made the right choice and that you will be fully satisfied with what you chose.

Breifly explain the 20/10 rule.

spend no more than 20% of annual take home pay; spend no more than 10% of monthly take home pay

Explain the difference between supply and demand

supply- what producers are willing and able to supply demand- what the consumer wants and what they are willing to pay for it

Explain the dollar-cost averaging technique. Why do investors use this technique? How can investor make a profit with it?

you put in a certain amount per month for purchasing partial shares, and you slowly end up with more shares and more money. he can sell his shares for a higher price and make a profit.