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