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Economics Ch.8
Why Everybody Needs To Save
| Term | Definition |
|---|---|
| This is the commitment of resources, such as money, to a project or purpose that is expected to bring future profit to the investor | Investment |
| This is another word for a person who borrows money or capital | Debtor |
| This is another name for a person who lends money or capital | Creditor |
| This is a type of bank account that allows checks to be written up to the dollar amount the account holder has deposited | Checking account |
| This is an account that allows checks to be written for up to the amount that the account holder has deposited | Transaction account |
| This is an account holders written order that authorizes his bank to withdrawal funds from his account | Check |
| This is a bank account that allows the account holder to earn interest on his deposits | Savings account |
| This is an account that guarantees a certain interest rate and has specified maturity date | Certificate of deposit |
| This is an account that allows limited transactions and pays interest rate that changes with the demand of loans | Money market account |
| This company insures money in all type of accounts up to $100,000 | Federal Deposit Insurance Corporation |
| This is a contract between tow parties in which one party protects the other against certain types of loss in exchange for payments known as premiums | Insurance |
| This is the amount paid to an organization in exchange for insurance coverage | Premiums |
| This is an arrangement provided by an individual's employer for the intent of providing for the employee's retirement from work | Person plan |
| This is when an employer promises to pay an employee a certain amount of money per month after their retirement based upon the employee's salary and length of service. They do not need to contribute money into a account. | Defined benefit plan |
| This is when a employer does not promise to pay a certain amount upon retirement. And the employer and employee have to contribute money regularly into a special tax free sheltered retirement account set up for the employee. | Defined contribution plan |
| This is resources that corporations gather by selling ownership in their bussiness | Stocks |
| This is a legal entity which is distinct from the people who own it | Corporation |
| This is equal portions of a corporation's stock | Shares |
| This is a person who owns shares in a corporation. These are the investors. | Stockholder |
| This provides protection to stockholder should the corporation declare bankruptcy or fail. This protects the investor from having to pay the firm's creditors money from their pocket. | Limited liability |
| This is shares of a corporation's profit and is divided into two categories: Cash and stock | Dividends |
| This is payment in the form of money | Cash dividend |
| This is payment in the form of additional stock in the firm | Stock dividend |
| This is a type of stock that people can invest in and in return can vote for matters such as who the officers of the corporation will be. Only paid in the good years. | Common stock |
| This is a type of stock that people can invest in and in return can receive a fixed amount of money each month in the good and bad years. | Preferred stock |
| This is a document that guarantees the bondholder the amount of his original investment plus a certain specified rate of interest by a certain date. | Bond |
| This is a type of investment in which a company will combine all their resources from their shareholders and invest that money into a wide variety of areas such as real estate, bonds and stocks | Mutual funds |
| These are stocks, bonds and mutual funds which means that hey are the assets that flow easily since they can be converted into other investments or cash without much time or difficulty | Liquid investments |
| Their are three key categories that determine how much your investments will grow. What are they? | Time, rate of return and amount invested |
Created by:
Leslie Spark
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