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put provision

gives the person who bought the bond a chance to sell it back at face value before it matures

traditional economy

goods and services corresponding to customs, beliefs, and history are prioritized

preferred stock

has the features of both common stocks and bonds

bond ratings

help evaluate the risk of a bond

medicare part a

hospital insurance

liquidity

how easily an asset can be spent, if so desired

bodily injury liability

if someone else died or was injured in a car accident, a person's insurance company pays for things like legal fees (if the person is sued), medical bills, and lost wages for the other person(s) if they are at fault

group plan

insurance plans that cover a large group of individuals, such as all the employees of a particular company or local government

corporate bonds

issued by businesses to help them pay expenses

municipal bond

issued by state and local governments to finance large public projects, such as water and sewer systems

government bonds

issued by the government to fund programs, meet their payrolls, and essentially pay their bills

managed care plan

limit participants to a specific list of providers

fixed annuity

money is paid back to a person at a fixed rate that will always remain the same (regular)

fair isaac corporation (FICO)

most widely used credit score; a number that summarizes a person's credit risk based on a snapshot of their credit report at a particular point in time

unsecured bonds

not backed by collateral

discount brokerage

offers reduced level of service, lower costs, and often the ability of a person to make their trades online

character

payment history

debt to income ratio (DTI)

percentage of (monthly) income used to pay debts; total monthly debt divided by monthly income

command economy

powerful centralized authority (usually government) dictates permissible levels of production and prices

microeconomics

the study of the decisions and interactions of individual households and firms

macroeconomics

the study of the economy (national or global) as a whole

economics

the study of the factors that determine the production, distribution, and consumption of goods and services (resources)

assets

things that have earning power or some other value to their owner

debit cards

tied to a bank account from which funds are withdrawn for each purchase

gross domestic product (GDP)

total dollar value of all the goods and services produced in a country in one year

capital

value of assets and net worth

bankruptcy

when a court judges that a debtor is unable to make payments owed to a creditor

variable annuity

when a person's money is invested and the money they get back is dependent on the performance of the market

primary stock market

where the IPO occurs; makes a company money

secondary stock market

where transactions taking place after the IPO occur; do not provide the company with any more money

bear market

a market in which a trend is down

bull market

a market in which a trend is up

collateral

assets that will secure the loan

grant

assistance given to an organization or individual to accomplish the stated purposes and objectives

debt

availability of debt, and the willingness to take it on, is a crucial ingredient of economic growth

junk bonds

bonds from companies with the highest risk

secured bonds

bonds that are backed by collateral

convertible bonds

bonds that can be converted into stock in the company that issued them

deferred anuity

deposited in advance

market economy

economic system where there is free competition

brokerage

a firm that provides a person access to the stock markets

bonds

a form of long term debt to be repaid on a specific date

securities and exchange commission (SEC)

a government agency that regulates and monitors the stock market

medicare

a government-sponsored health insurance plan that is funded largely by taxes that most working people pay; provides benefits to individuals who are at least age 65 and quality for social security, or to individuals who are disabled

speculative investment

a high risk investment that might earn a large profit in a short time

creditor

a lender whether by making a loan, buying a bond, or allowing money owed now to be paid in the future

installment sales credit

a loan that allows a person to receive merchandise, usually high-priced items

coupon rate

a bond's interest rate

durable goods

a category of consumer goods that are not purchased frequently because they are made ot last for a long time (usually three years or more)

commodity

a comparatively homogeneous product that can typically be bought in bulk

home equity line of credit (HELOC)

a credit line tied to the level of equity in a person's home

installment cash credit

a direct loan for money for personal purposes, home improvements, or vacation expenses

dividends

a distribution of cash by a company to its shareholders

waiting until a check clears

a person is waiting for the bank to approve of a check deposit

common stock

a person owns a share in a company's success

property damage liability

a person's insurance company helps pay for the damage to someone else's property if they are at fault

certified check

a personal check with a guaranteed payment

stop payment order

a request that a bank or other financial institution not cash a particular check

individual retirement account (IRA)

a retirement plan (usually provided by a person's employer) that takes a portion of a person's earned income before tax and saves it in an IRA account until after they retire

appreciation

a rise in the value of an asset

home equity loan

a secured loan that allows a person to borrow a set amount against their equity at a fixed interest rate and repayment term (generally thirty years)

collision coverage

a type of coverage that pays for damage to a person's car if it collides with another object

reserve requirement

a value set by the federal reserve that can influence the amount of money banks can lend

proposal

a written document prepared to apply for funding

credit cards

allow a person to purchase items up to their credit limit

indemnity plan

allow participants to seek healthcare from any qualified medical provider

special endorsement

allows a person to transfer a check to an organization or another person

joint account

an account that has two or more owners

deductible (health)

an amount of money a policyholder must pay before an insurance policy begins paying claims

overdraft protection

an automatic loan made to an account if the balance will not cover checks written

annuity

an insurance contract issued and distributed by financial institutions with the intention of paying out invested funds in a fixed income stream in the future

mutual fund

an investment option that sells shares to investors in order to collect a pool of money that is then used to buy various investments

face value

comes from the fact that a bond's maturity value is printed on the front of the bond

mixed economy

contains characteristics of market and command economic systems

uninsured motorists (UM)

covers a person that got into an accident with someone who does not have auto insurance

comprehensive coverage

covers the physical damage to a person's car form most other causes including fire, theft, vandalism, hail, etc.

capacity

present and future ability to meet payment obligations

venture capital

private equity to help new companies grow

full service brokerage

provides advice and executes a person's trades for them

stocks

represent ownership in a company

contract

represents a procurement or purchase arrangement in which the contracting agency "buys" services from the organization or individual to fulfill the contracting agency's obligations or responsibilities

restrictive endorsement

requires the check holder's signature and a restriction on how the paper may be used by the bank

charge cards

similar to credit cards in that they allow a person to pay for purchases up to their credit limit, which is determined by previous purchase history

immediate annuity

starts to make payment to a person as soon as they deposit the sum of money to their insurer

deductible (auto)

the amount a person agrees to pay for repairs in case of an accident

premium

the amount a person pays in exchange for insurance coverage

productivity

the amount of goods / services produced per unit of labor

price elasticity of demand

the amount the demand for a good or service changes in relation to its price

law of demand

the claim that the quantity demanded of a good falls when the price of the good rises, other things being eiqual

callability

the company or agency that issued the bond has the right to call the bond back in a time of their choice

opportunity cost

the cost of any action; what is given up to get something

home equity

the current value of the home minus the amount owed on mortgage

maturity date

the expiration date of a bond and the company pays the face value of the bond to the lender

initial public offering (IPO)

the first sale of a stock when a company chooses to "go public" and the company receives money

funder

the government, foundation, or corporate resource to whom the proposal is submitted

time value of money

the idea that a dollar today is worth more than a dollar in the future

reconcile a checking account

the process of determining the true balance of the account and comparing it with the bank balance on the reconciliation form

capital gains

the profit from the sale of a capital asset, such as a share or a property

london interbank offered rate (LIBOR)

the rate of interest that top-quality banks charge each other for loans

endorsement

the signature of the payee, the party to whom the check has been written; signing check to get payment


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