econ chapter 6

individual who invest in corporation and share in the company's profits are known as

stockholders

is sold by local or state government. interest by federal government

tax-exempt bond

savings bond sell for less than their face value because

they pay interest

savings plan that require savers to leave their funds on deposit for certain periods of time

time deposits

a large investment sold by the treasury department. matures in a few days to 26 weeks

treasury bills

mature in 30 days & have minimum amount of $1,000 and sold by federal gov

treasury bonds

mature in 30 days and have a minimum amount of $1,00

treasury bonds

maturity dates of 2 to 10 days and minimum amount of $1,000

treasury notes

The Dow's Jones industrial average is

a stock index

allows a person earning less than $30,000 to contribute up to $4,000 a year and to deduct those contributions from taxable income

IRA

money market deposit account

account with relatively high rates of interest, requires minimum balance, & immediate access to funds

the FDIC insures

accounts at all financial institutions

person who act as a go-between for buyers and sellers of stocks & bonds

broker

profits earned on the sale of stocks are known as

capital gains

states the amount of deposit, the maturity, and the rate of interest being paid

certificate of deposit

spreading of investment among several different types to lower overall risks

diversification

bondholders earn - from the borrowing company or government

interest

allows self-employed people to set aside a maximum of 15 percent of income up to a specified amount each year and deduct that amount from their yearly taxable income

keogh plan

bond provides

lower level of a risk then a stock

period of time at the end of which time deposits will pay a stated rate of interest

maturity

uses investors money to make short-term loans to businesses and banks

money market fund

an easy way to invest in a variety of stocks and bonds is to participate

mutual funds

electronic purchase and sale of stocks and bonds

over the counter market

is an investment in ones own home, condominium, or co-op and has often proven to be wise

real estate

pension plans are provided by many companies to help employees save for

retirment

an account that pays interest, has no maturity date, and from which you can withdraw funds without penalty is a

savings account