Econ Unit 5
What is the importance of a bank statement?
Check off all transactions as they clear the bank.
The __________ deals primarily with agricultural goods and livestock.
Chicago Mercantile Exchange
The stock exchange that, among other things, deals with agricultural and livestock commodities is the _____________________.
Chicago Mercantile Exchange
_______ is a score that rates the level of risk for borrowing money.
Credit score
Two types of government-secured loans a home buyer could potentially use in purchasing a home include loans from the ____________________ and ______________.
Federal Housing Administration Veterans' Administration
What is the major benefit of declaring bankruptcy?
It allows a person a clean slate and a clear plan towards paying off debt.
What is the major difficulty to declaring bankruptcy?
It destroys your credit and makes it very difficult to rebuild it.
What is NOT an advantage of a corporation that differs from other types of businesses?
It is subject to more tax laws than other types of businesses.
The ________________ provides computerized stock information for investors, as well as publicly traded stocks and securities.
NASDAQ
What organization provides computerized information on stocks to investors?
NASDAQ
The ___________ is the largest and oldest stock exchange in the United States.
New York Stock Exchange
The oldest of the stock exchanges in the United States is the _________________.
New York Stock Exchange
What are the three types of loans offered by banks? Select all that apply.
Three types of loans typically offered by banks are consumer, home, and commercial.
______________ are also known as certificates of deposit (CDs).
Time deposits
What is the purpose of a check registry?
To keep track of the amount of money in your checking account.
What are two types of government-secured loans a home buyer could potentially use in purchasing a home?
Veterans' Administration Federal Housing Administration
checking account
a bank account that allows customers to pay for items in stores or through the mail with paper "tickets" that are drawn directly from the funds in said account
commodity
a basic good that can be interchangeable with other commodities of the same type
Who serves as a middleman between an investor and a stock seller?
a broker
stock information
a collection of data that generally includes the stock symbol, the price of the company's stock, whether it has increased or decreased as well as the change in dollars and in percentage
sole proprietorship
a company owned by a single individual with no partner, board, or corporation in support
partnership
a company owned by two or more people with no board or corporation in support
public company
a company that allows for shares of ownership to be publicly traded
private company
a company that does not allow the trading of its ownership by stockholders; does not trade publicly
credit score
a cumulative score that rates the level of risk for borrowing money; used by all businesses and banks to assess the risk associated with offering a loan, credit card, or advancement of cash
government security
a debt incurred by the government and backed by the country's credit with very little chance of defaulting on the loan
A Veterans' Administration loan is one of the only types of housing loan that does not require ________________.
a down payment
security deposit
a fee that is taken by a rental agency or individual to protect against any possible damage to the property; usually given back upon moving, provided no damage or other issues arise
In order to secure most home loans and to protect the buyer from a future problem, most lenders require __________.
a home inspection
What do lenders require in order to secure most home loans and to protect the buyer from a future problems?
a home inspection
What is typically required before a potential home buyer can acquire a home loan?
a home inspection
single-family home
a home that is not connected to any other building or structure and typically has a lawn
consumer loan
a loan offered by banks that normally help pay for home improvements or any immediate item a borrower needs to address
commercial loan
a loan offered by banks to assist in the creation of a small business or to help in the advancement of that business
home loan
a loan offered by banks used to pay for a home
paycheck loan
a loan offered by independent businesses as an advance on the customer's paycheck but usually accompanied by very high interest rates
bank statement
a monthly report where the bank communicates with its customers on what they have on record as having taken place with their various accounts
broker
a person who serves as a middleman between the investor and the seller of stocks
check registry
a personal ledger that allows a bank customer a way of keeping track of how much money he or she has in the checking account, especially when money is withdrawn to pay for checks they write
stock
a piece of a company whose value is congruent with the value of the company; also known as a share
renter's insurance
a policy that insures the goods found within a rental place and upon anything happening to said goods; will reimburse the money value of the goods
homeowner's insurance
a policy that is designed to cover the home, the belongings within, or any accident which may occur on the property
comprehensive insurance
a policy that is designed to protect against all matters of other destruction, namely "acts of God"; not required by most states
liability insurance
a policy that is designed to protect damages to other people or property in the event of an automobile accident; the only type of automobile insurance required by all states in the United States
automobile insurance
a policy that is designed to protect the automobile and any damages created as a result of an accident
collision insurance
a policy that is meant to protect the car and its owner in the event of an accident that does not involve any other car or property; this type of insurance is not required in most states
life insurance
a policy that provides financial assistance in the event of the death of the policy holder and is typically used to provide help for the policy holder's family
health insurance
a policy that provides financial assistance in the event that medical care is required and mitigates the cost of doctors' visits and hospital stays
home inspection
a requirement for most home loans; an inspection by a third party of the house in question in which all potential future problems are identified and consideration thereof is a part of the negotiation for the final transaction of the house
treasury bill
a security sold by the Department of the Treasury and is generally considered very safe but offers low yield in return
bond
a security sold by the US government generally considered very safe and provides a higher yield in return; compared to stocks and commodities it is still considered quite low
steps to renting
a series of important measures taken to insure you get the most out of a rental and meet all obligations to the landlord
steps to buying/owning
a series of important measures taken to insure you get the most out of buying a home and meet all obligations in order to keep that home
New York Stock Exchange
a stock exchange that allows for the buying, selling, and trading of all stocks and securities as well as commodities; the largest stock exchange in the United States
Chicago Mercantile Exchange
a stock exchange that deals in many types of investments but noted for its trading of agricultural and livestock goods
NASDAQ
a stock exchange that trades a collection of businesses and also provides electronic information on stocks for investors and brokers
real estate tax
a tax based on a portion of the value of the home and the land it sits on
standard fixed-rate mortgage
a type of home loan in which mortgage payments, interest rate, and the terms of the loan are fixed for the duration of the loan
flexible-rate mortgage
a type of loan in which the mortgage payments, interest rate, and the term of the loan can fluctuate at any time, typically as a result of changes in the economy or in ownership of the loan
_______ is the value of a home minus the amount still owed on the loan.
equity
A stock's information includes all of the following EXCEPT ________________.
future predictions of the stock's value
What are the four major parts of one's life that require insurance?
health homeowners auto life
What can health insurance help to reduce or eliminate?
hospital stays medications specific procedures doctors' visits
_______ is a fee charged for borrowing money.
interest
One of the major obstacles to declaring bankruptcy is that ____________________.
it destroys your credit and makes it very difficult to rebuild it
All states require all car owners to carry ________ insurance to protect against damage to other people's property and welfare.
liability
What type of automobile insurance is required by all states and deals with damage suffered by others to their person or property in an auto accident?
liability
What are the three major components of automobile insurance?
liability collision comprehensive
Which of the following is a major type of insurance that a person will find themselves in need of at some point in their life? Select all that apply.
life health homeowner's automobile
Which of the following characteristics describe a sole proprietorship?
manageable start-up costs an easy model to create and manage difficulty obtaining capital
_______ is the duration of a CD.
maturity
A ___________ generally requires a balance of at least $2,000.
money market account
A(n) _______ has high interest but a required balance.
money market account
A(n) _______ pays a higher interest rate and must maintain a high balance in the account.
money market account
Which of the following characteristics describe a corporation?
needs a great deal of organization and recordkeeping easy transfer of ownership limited liability
A _____________ is two or more entrepreneurs who pool resources and talent to ensure the success of a business.
partnership
What is NOT necessary to do when renting a house or apartment?
pay for an inspection of the dwelling
Which service or loan is NOT found in a typical bank?
paycheck loan
A standard fixed-rate mortgage allows for fixed ____________ and _______________ throughout the duration of the loan.
payments interest rates
A ______________ can be relocated and is typically the least-expensive option for a residence.
pre-fabricated home
What type of dwelling is economical and portable?
prefabricated home
A(n) _____________ tax is based on the value of the home and the property upon which the home sits.
real estate
What tax is based on the value of the home and the property upon which the home sits?
real estate
How does the government provide incentive for giving charity to those in need?
tax deductions
Which of the following would NOT be a type of commodity?
televisions
What organization deals mostly with agricultural goods and livestock?
the Chicago Mercantile Exchange
What is the largest and oldest stock exchange in the United States?
the New York Stock Exchange
A typical check includes all of the following EXCEPT __________.
the address of the individual or business to whom the check is written
What is NOT a part of a typical check?
the address of the individual or business to whom the check is written
A typical check does NOT include _________.
the bank's telephone number
interest
the income the lender receives from loaning money
maturity
the length of time that defines a certificate of deposit, at the end of which the CD must be repaid
The biggest advantage to buying a home as opposed to renting is _______________________.
the opportunity to build equity
What is the biggest advantage to buying a home as opposed to renting?
the opportunity to build equity
bankruptcy
the process of the borrower giving up any valuable property in order to pay off the lenders
A foreclosure is _____________.
the takeover of a home by the lender once the owner can no longer make the mortgage payments
What is the purpose of a foreclosure?
the takeover of a home once the owners can no longer make the payments
foreclosure
the taking over of a home once a homeowner can no longer pay for his or her mortgage
stock price
the value of the company as shown in the price of the stock
A(n) _______ is also known as a CD.
time deposit
A ______________ is connected to other structures on either side and have very little lawns, if any.
townhouse
What type of dwelling is connected to other homes and has little to no yard?
townhouse
What are the major components found in stock information? Select all that apply.
trading symbol stock price whether stock has increased or decreased from the previous day
townhouse
typically found in larger cities and connected on each side by another townhouse and usually has little in the way of a lawn
Which of the following characteristics describe a partnership?
unlimited liability difficulties transferring ownership it's easier to obtain capital
Information about a stock will include _________________.
whether the stock value is declining or increasing the stock price the stock symbol the change in dollars and percentage
How do private and public companies differ?
A private company is not publicly traded like a public company.
What is the difference between a private and public company?
A private company is not publicly traded like a public company.
Place the following steps for renting or buying a place to live in the correct order of operation. 1 2 3 4 5 6 7 8
1. select the part of town where you want to live 2. make a list of things you want or need in dwelling 3. investigate options in the region 4. visit the area or actual place under consideration 5. make a list of any pre-existing problems with the dwelling 6. sign a contract for the place under consideration 7. set up any utilities or other services you want about 2 weeks prior to moving in 8. don't be late with rent/mortgage
Use the graph to answer the following question. What decade saw the highest climb in rentals?
1980's
What differentiates a bond from a t-bill?
A bond generally provides a greater yield due to higher interest rate than the t-bill.
_______ is based on a portion of the value of the home and land it sits on.
Real estate tax
_______ insurance is voluntary and covers only personal belongings against loss. _______ insurance is required and covers the dwelling and property.
Renter's Homeowner's Renter's insurance is voluntary and covers only personal belongings against loss. Homeowner's insurance is required and covers the dwelling and property.
How are renter's insurance and homeowner's insurance different?
Renter's insurance protects only items in the dwelling. Homeowner's insurance protects both the home and the property upon which it sits.
What is the difference between renter's insurance and homeowner's insurance?
Renter's insurance protects only items in the dwelling. Homeowner's insurance protects both the home and the property upon which it sits.
____________ provide very low interest rates and are used to hold money.
Savings accounts
Which of the following are part of the steps that you should take before renting or buying a place to live? Select all that apply.
Sign a contract for the place under consideration. Make a list of any preexisting problems with the dwelling. Set up any utilities or other services you want about two weeks prior to moving in. Select a part of town where you want to live.
What organization measures the credit reports of companies and countries?
Standard and Poor 500
What organization measures the performance of the top 500 companies?
Standard and Poor 500
The __________________ measures the credit reports of companies and countries.
Standard and Poor's 500
The ____________________ provides an average of the performance of the top 500 companies in the United States.
Standard and Poor's 500
___________ measures the performance of the top 500 companies.
Standard and Poor's 500
What is NOT an advantage of a sole proprietorship?
The owner has unlimited liability.
What is the purpose of a foreclosure?
The takeover of a home by the lender once the owner can no longer make the mortgage payments.
Veterans' Administration (VA) loan
a type of loan offered only to veterans and their spouses; generally offered at a lower interest rate than what civilian home buyers can find; the majority of the loan is guaranteed and does not always require a down payment
Federal Housing Administration (FHA) loan
a type of loan that the government will secure often allowing a person to apply for more money than would ordinarily be obtained; the interest rate and the monthly mortgage payment do not change (similar to that of a standard fixed-rate mortgage)
time deposits
a type of savings account that is differentiated by a time frame within which one cannot withdraw money without paying a penalty or provide advance notice; typically referred to as certificate of deposits (CDs)
money market account
a type of savings account, but differs in that it offers a higher interest rate and requires high balance and deposits of at least a certain amount
What part of a rental agreement is generally non-refundable?
application fee
What are the types of commodities typically traded? Select all that apply.
agricultural products natural resources livestock
Which of the following commodities are commonly traded?
agricultural products natural resources
prefabricated home
also known as a mobile home that can be placed and transported at will; usually the cheapest option but does not guarantee a spot upon which to place the structure
stock symbol
an abbreviated symbol of two to four letters that is used when trading the company
savings account
an account that provides a means to hold money with a minimal interest rate
condominium
an apartment-like abode when the owner can make changes to the structure or appearance of the place, with some exceptions placed on it by the owner of the building
Dow Jones Industrial Average
an average of the economic performance of 30 large companies in the United States; also known as the Dow or the Dow Jones
corporation
an entity made up of the owners of the company, generally in the form of stockholders, and licensed by the government to conduct business
Standard and Poor
an independent company that provides credit reports of companies and countries for investors
charity
any type of donation of money, time, or effort for the express purpose of helping others with no consideration for reward (though reward can follow monetary donations in the form of a tax deduction)
A(n) _______ is generally nonrefundable and a(n) ______ is usually refundable, provided the conditions for the agreement are met.
application fee security deposit An application fee is generally nonrefundable and a security deposit is usually refundable, provided the conditions for the agreement are met.
Government securities that are commonly traded include ___________ and ___________.
bonds treasury bills
___________ and _________ are two types of government securities typically traded.
bonds Treasury bills
A __________ serves as a middleman between an investor and a stock seller.
broker
_______ is a donation for the express purpose to help others.
charity
The importance of a bank statement is to __________.
check off all transactions as they clear the bank
A(n) _______ is an account for paying bills with no interest.
checking account
_____________ insurance would be required to protect a car that went off the road, causing damage to the vehicle and nothing else.
collision
_____________ auto insurance would be required to protect a car damage by a tornado.
comprehensive
A(n) _________ has the look and qualities of an apartment.
condominium
What type of dwelling requires payment for general maintenance completed by the facility?
condominium
Three types of loans offered by banks include ____________.
consumer commercial home
An entity of individuals who are legally seen as a group is a ______________.
corporation
Health insurance can reduce or eliminate the costs of ______________. Select all that apply.
doctors' visits medications specific procedures hospital stays
equity
refers to the value of a home minus the amount still owed on the loan; represents the worth of a home in real terms to the home owner
Use the graph to answer the following question. The lighter-shaded area refers to __________. The darker-shaded area refers to __________.
rental units that are occupied the remaining empty rental units yet to be leased. The lighter-shaded area refers to rental units that are occupied. The darker-shaded area refers to the remaining empty rental units yet to be leased.
What are the risks associated with borrowing money?
repossession of the item bought with credit as a result of not paying back the loan
A(n) _______ is a low interest money holding option.
savings account
What part of a rental agreement is usually refundable, provided the conditions for the agreement are met?
security deposit
A(n) _________________ is a free-standing structure (not connected to another structure) and typically has a lawn.
single-family home
What type of dwelling is the most common and the most expensive?
single-family home
. Match the different types of homes you can purchase with the correct description. _________ free-standing structure, not connected to another structure, has a lawn ________ connected to other structures on either side; may not have lawn ________ has the look and qualities of an apartment ________ can be relocated; least-expensive option
single-family home — free-standing structure, not connected to another structure, has a lawn townhouse — connected to other structures on either side; may not have lawn condominium — has the look and qualities of an apartment but you own it prefabricated home — can be relocated; least-expensive option
The most common type of business is a ________________.
sole proprietorship
The most likely person to purchase life insurance is ____________.
someone with a spouse and children
Who would be the type of person is most attracted to the idea of life insurance?
someone with a spouse and children
. In a ______ mortgage, the payments, interest rate, and term do not change for the duration of the loan; in a ________ mortgage, the payments, interest rate, and term are subject to change depending on the market.
standard-fixed rate flexible-rate
What type of mortgage restricts any changes in the payments, interest rate, and term for the duration of the loan? What type of mortgage allows the payments, interest rate, and term to change, depending on the market?
standard-fixed rate flexible-rate
A business sells _________ to increase investment in their company.
stock
What does a business sell in order to increase investment in their company?
stock
safe stock
stock in a company that, through past performance, has shown little vulnerability to the forces in the market but maintains a growing or even stock performance