ch. 6 review

The largest volumes of smaller companies are quoted on what stock exchange

National Association of securities Dealers Automated quotations national market system

What is the name of the largest stack exchange

New york stock exchange (NYSE)

What are tax-exmpt bonds

bonds sold by local and state governments; interest paid on the bond is not taxed by the federal government

Profits made on the sale of stock are referred to as what

capital gain

What is a mutual fund

investment company that pools the funds of many individuals to buy stocks, bonds, or other investments.

What is a bond

is a certificate issued by a company or the government in exchange for borrowed funds.

What is a Roth IRA

is a private plan for individuals, Taxes income before it is saved, and does not tax interest on that income retirement

What is an IRA

is a private retirement plan for individuals or married couples to save a certain amount of untaxed earnings per year with the interest being tax- deferred.

What is the Dow Jones Industrial Average

the dow is the most well known index

What do banks do with the money you deposit into your checking& savings accounts?

time deposits require savers to leave their funds on deposit for certain periods of time, or maturity.

What is a benefit and drawback of investing your money in money market deposit accounts

(MMDA) pays high rates of interest, requires a minimum balance of $1,000 to $2,500, and immediate access to funds

In what two ways do stockholders Benefits from stocks

- Earn dividends or a return based on the amount of stock invested - can sell stock for more than they paid for it

The FDIC insures deposits up to how much

After the stock market crash of 1929, the federal Deposit Insurance Corporation (FDIC) was created to protect peoples' funds. FDIC insures deposit up to $100,000

What do you get from any type of savings plan as long as you have funds in your account?

Intrest

What ia a pension plan

Is a company supported plan like a 401(k) that is not taxed until used.

Interest rates offered by CD's are determined by what

Time deposits are often called certificates of deposit (CDs) or savings certificates. Interest rates on CDs depend of the length of maturity

diversification

To lower your overall risk