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Econ. Ch. 6 Vocab.
| Term | Definition |
|---|---|
| saving | setting aside income for a period of time so that it can be used later |
| savings account | account that pays interest, has no maturity date, and from which funds can be withdrawn at any time without penalty |
| money market deposit account | account that pays relatively high rates of interest, requires a minimum balance, and allows immediate access to funds |
| time deposits | savings plans that require savers to leave their funds on deposit for certain periods of time |
| maturity | period of time at the end of which time deposits will pay a stated rate of interest |
| certificates of deposit | time deposits that state the amount of the deposit, maturity, and rate of interest being paid |
| stockholders | people who have invested in a corporation and own some of its shares of stock |
| capital gain | increase in value of an asset from the time it was bought to the time it was sold |
| capital loss | decrease in value of an asset from the time it was bought to the time it was sold |
| tax exempt bonds | bonds sold by local and state governments; interest paid on the bond is not taxed by the federal government |
| savings bonds | bonds issued by the federal government as a way of borrowing money; they are purchased at half the face value and increase every 6 months until full face value is reached |
| Treasury bills | certificates issued by the U.S. Treasury in exchange for a minimum amount of $1,000 and maturing in a few days up to 26 weeks |
| Treasury notes | certificates issued by the U.S. Treasury in exchange for minimum amounts of $1,000 and maturing in 2 to 10 years |
| Treasury bonds | certificates issued by the U.S. Treasury in exchange for minimum amounts of $1,000 and maturing in 30 years |
| broker | person who acts as a go-between for buyers and sellers of stocks and bonds |
| over-the-counter market | electronic purchase and sale of stocks and bonds, often of smaller companies, which often takes place outside the organized stock exchanges |
| stock market indexes | measures of what is happening to a given set of stock prices for a specified list of companies; the most well known is the Dow Jones Industrial Average |
| mutual fund | investment company that pools the funds of many individuals to buy stocks, bonds, or other investments |
| money market fund | type of mutual fund that uses investors’ funds to make short-term loans to businesses and banks |
| pension plans | company plans that provide retirement income for their workers |
| Keogh plan | retirement plan that allows self-employed individuals to save a maximum of 15 percent of their income up to a specified amount each year, and to deduct that amount from their yearly taxable income |
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