the BIG money test guys
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tied to a bank account from which funds are withdrawn for each purchase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
