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Banking_FinalReview
Banking and Finance Final Review
| Question | Answer |
|---|---|
| Money | something generally accepted as a medium of exchange, a measure of value or a means of payments |
| Currencies | system of money in general use in a country |
| Coin | type of money made with metal, stamped and issued by the authority of government |
| Banknotes | promissory notes issued by a Federal Reserve Bank |
| Cash | form of legal tender which can be used to exchange goods, debt or services |
| Debit Card | payment card which provides the cardholder electronic access to their bank account |
| Credit Card | payment card issued by a bank to cardholders as a method of payment |
| Personal Check | slip of paper which allows the user to make a payment from his or her bank account to a business or individual |
| Money Supply | total amount of monetary assets available in a country’s economy at a specific time |
| Money Demand | desired holding of financial assets in the form of money– cash and bank deposit |
| Continentals | paper currency issued in 1775 by the Continental Congress |
| Basic Functions of Money | store of value, unit of account, medium of exchange |
| unit of account | a standard monetary unit of measurement of value that provides a common base of price |
| US Treasury Department | the government department that issues government bonds and creates currency and coinage |
| free banking era | the time from 1836-1865 where there was no central bank in the US |
| fiat money | a type of currency a government has declared legal tender, but not backed by a physical commodity |
| credit cards | are not considered a form of currency |
| FDIC | created to insure bank deposits after the major monetary losses that helped begin the Great Depression |
| 1971 | when the US gold standard was completely replaced with fiat money by President Richard Nixon |
| forms of financial exchange | cash, credit cards, debit cards, personal checks, & electronic funds |
| The Fed | the short name for The Federal Reserve, the central bank of the United States |
| Annual Percentage Rate | APR; annual rate of interest |
| Depositor | person who deposits money in a bank or who has a bank account |
| Interest | the amount of money paid by a customer to a financial institution for borrowing money through a loan, credit card, etc. |
| Required Minimum Balance | least amount required to be kept on deposit in a bank account |
| Credit Score | represents creditworthiness in a person, which is the likelihood he/she will pay debts in a timely manner |
| Fixed Rate Interest | interest rate does not fluctuate during the fixed rate period of the loan |
| Adjustable Rate Interest | interest rate may fluctuate up or down during the term of the loan |
| Installments | buyer gains use of the commodity immediately and pays for it in periodic payments |
| Lump Sum | single sum of money which serves as complete payment |
| Collateral | property acceptable as security for a loan or other obligation |
| Application Fee | money paid to the bank or mortgage company to cover expenses of processing a loan application |
| Credit Check | when a potential lender buys a copy of one’s credit history to determine whether or not he/she is someone with the ability and character to repay a debt |
| Net Worth | total assets minus liabilities or debt |
| Stocks | ownership of a corporation indicated by shares which represent a piece of the corporation’s assets and earnings |
| Bonds | debt securities issued by a corporation or unit of government to raise money |
| Portfolio | total holdings of the securities, commercial paper, etc. of a financial institution or private investor |
| Trade | used to describe buying and selling stocks or bonds on the capital market |
| Personal Savings Account | the best account for transferring monthly money from a new savings account into a personal checking account |
| Certificate of Deposit Account | a type of account that you can invest in where you will not need access to your money for a set amount of time |
| Basic Savings Account | an account with an advantage that allows you to access your money anytime you want |
| Service Fees | you usually do not have to pay these if you have the advantage of a checking and savings account at the same bank |
| Online Banking | allows you access to checking and savings account at almost any time |
| Credit Bureaus | institutions responsible for providing your credit score; Equifax, Experian, and TransUnion |
| Credit History | this is gathered from your public record and customer credit information |
| Payment History | this is the most important component of your credit score |
| Principal | known as the amount of money actually borrowed with the loan |
| Cost (Interest) | known as the additional amount of money you will repay to the bank, along with the amount borrowed with the loan |
| Term | known as the length of time you have to pay the loan back in full to the lender |
| Line of Credit | known as having a set limit of money which can be borrowed at any one time and interest is only paid on the amount borrowed |
| Upfront Fees | fees that are usually included for application processing, attorney's expertise, and your credit report |
| Investments | contains the three major categories of stocks, bonds, and cash |
| Down Payment | a payment that goes toward the ownership of your new home |
| Homeowner | the party responsible for maintenance and repairs of the home you own |
| Real Estate | you can “flip” it, use it as rental property, or as your primary residence |
| ATM | Used to withdraw cash from a checking account. |
| Balance | An amount available or owed on an account. |
| Check | An order to pay another person an amount of money from your account. |
| Check Register | Record of all deposits to and withdrawals from a checking account. |
| Checking Account | Account where money can be withdrawn with checks or a debit card. |
| Cleared Check | When money has transferred from the account of the payer to the payee. |
| Debt | The amount you owe on a loan. |
| Deposit | Money placed into an account. |
| Direct Deposit | Paycheck that is electronically transferred into your account. |
| Expense | Anything you spend money on. |
| Gross Pay | The total amount of a paycheck before taxes. |
| Income | Money earned through work. |
| Insurance | A product offered by a company promising to protect you from specific financial risks. |
| Net Pay | The amount of a paycheck after taxes are subtracted from Gross Pay. |
| Overdraft | Credit extended from a financial institution when an account has insufficient funds. Usually results in a fee. |
| Paystub | A document that comes with your paycheck, showing how much you were paid and how much was withheld for taxes. |
| Reconciliation | A way to balance your account records with your bank or credit union. |
| Savings Account | Account for storing or saving money with limited withdrawals. |
| Transfer | When money is moved from one account to another. |
| Ethics | set of standards of conduct that guide decisions and actions based on duties derived from core values |
| Ethical Behavior | action guided by a set of principles of morality |
| Moral Behavior | conduct in accordance with what a person determines is right versus wrong |
| Legal Behavior | conduct based on or authorized by law, which is established by society to maintain order and protect people and properties from harm |
| Ethical Dilemma | complex situation in which people have difficulty choosing between a moral or an immoral act |
| Code of Ethics | set of written standards issued by an organization to assist its employees in conducting their actions in conformity with the organization's ethical values |
| Business Social Responsibility | duties and obligations of businesses which contribute to the wellbeing of society |
| Stakeholders | all the parties which interact with the business |
| What is the primary purpose of a spending plan? | to see how much money you have each month |
| Who is responsible for restoring your credit when you identity is stolen? | yourself |
| Which type of bank is most widely used? | commercial banks |
| What is the purpose of providing a bank statement to a customer? | to show activity during a specific time period |
| What should you do with all deposit receipts as well as receipts for purchases until reconciliation process happens? | keep them |
| The conversion of a message into code is known as which of the following? | Encryption |
| What is the same amount of money earned on a set interval basis, such as monthly or quarterly? | Fixed Income |
| What is the amount of money earned is not the same each pay period? | Variable Income |
| What is a bill, such as monthly rent, which is the same each month? | Fixed Expense |
| What is a bill, such as a utility bill, which is a different amount each month? | Variable Expense |
| What is money without a specific purpose left over each month after all bills have been paid? | Discretionary Expense |
| What is stealing of a person’s financial information, such as credit cards and Social Security number, with the intent to make purchases under the person’s identity? | Identity Theft |
| What is phony business deal created to get money from people with intention of giving anything in return? | Scam |
| What are requests for money, services, donations, etc.? | Solicitations |
| What is the schedule of recurrent times in any regular system of preparing or sending bills? | Billing Cycle |
| What is the specific listing of individual pieces or units of information? | Itemization |
| What is anything which saves or simplifies work, adds to one’s ease or comfort, etc.? | Convenience |
| What is the conversion of a message, information, etc., into code? | Encryption |
Created by:
Mr.Johnston
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