Economics Unit 5

individual retirement account

Individuals with earned income use this to make tax-deferred investments for retirement.

credit

Making on-time payments will boost one's ___________________ score.

liability

Motorists in every state are required to have _______ insurance.

partnership

Multiple people share the profit, loss, risk, and work of ownership in this type of business structure.

level of education

One's ________ will most affect future earning potential

stocks

Over time, ____ generally increase in value due to new technology, trade opportunities, employee labor, and new ideas.

financial

Passive investors may wish to enlist the help of a(n) _____________________ advisor.

disability insurance

This financial product benefits workers who are physically unable to work.

mutual funds

This investment was created to help investors pool money and benefit from professional money managers.

commercial loan

This is offered by banks to help small businesses begin or expand.

limited liability company (LLC)

This type of business structure provides protection against personal liability.

standard fixed-rate loan

This type of loan charges the same rate and payments for the life of the loan.

mortgage

This type of loan is secured by the same property that it is being used to purchase

investors will pay more for older bonds with higher interest rates

When interest rates go down, bond fund prices go up because ___.

risk

Wise investors understand the ______________________ involved before making an investment.

paycheck

______ loans charge very high fees and interest rates.

term

________________________ life insurance will only pay a benefit if the insured person dies within a certain time period.

mutual

_________________________ funds were created to pool investors' money and encourage small, periodic investments.

commodity

a basic good that is interchangeable with other commodities of the same type

dividend

a portion of a company's profit distributed to shareholders

Chicago Mercantile Exchange

a stock exchange noted for its trading of agricultural and livestock goods

Standard & Poor's 500 Index

a stock index that tracks hundreds of the largest publicly traded U.S. companies

education tax credits

enables college expenses to reduce one's tax burden dollar for dollar

equity

the value of a home minus the amount still owed on the loan; represents the worth of a home in real terms to the homeowner

New York Stock Exchange

this American stock exchange is the largest in the world

capital

Banks create large pools of ________________________ from which others may borrow.

checking

A(n) ____________________ account allows customers to pay with paper "tickets" or electronic transfers drawn directly from the account

federal

A(n) ______________________ loan must be repaid after a student finishes attending college

index

A(n) ______________________ tracks a segment of a market or an entire market.

private

A(n) ________________________ company does not have or allow trading of its ownership by stockholders.

publicly

A(n) ________________________ traded company issues shares of ownership through stock offerings

scholarship

A(n) _________________________ is money awarded for education expenses because of need or merit.

commission

A(n) charge for financial advice or a transaction is called a(n) ________________________.

history

Building a good credit ________ is important for being able to purchase a home or other expensive items.

diversification

According to the principle of ________________________, investors divide their money among multiple investments.

exchange-traded fund

A basket of investments can be traded just like stocks.

declaring bankruptcy

A borrower must give up valuable assets to help repay a lender when ________________________.

entity

A legal _______________________ is a group or organization recognized by the government as such.

maturity

A loan or CD must be repaid when it reaches ___________________ after a certain period of time.

principal

The amount of a loan used to calculate interest is the ________.

gross wages

The amount of an employee's income before any deductions are made is the _______________________.

FHA loan

The federal government has insured ___ loans since they were created as part of a New Deal program

military aid

allows members to receive aid for college through the Montgomery G.I. Bil

NASDAQ

an electronic stock exchange that has historically emphasized technology companies

Dow Jones Industrial Average

an index tracking the stock performance of 30 selected large companies

whole life policy

an insurance product that has both insurance and investment components

term life policy

an insurance product that pays out a specified amount if the insured dies during the term of the policy

security

an item of value promised to a lender if a loan is not repaid

round lot

any multiple of 100 stock shares

reconciliation

comparing two sets of records to ensure accuracy

grant

direct aid based on eligibility that does not have to be repaid

delayed gratification

resisting the temptation to receive an immediate reward, and waiting instead for a later, greater reward

safe stock

stock in an established company that has shown little vulnerability to market forces and maintains a growing or even stock performance