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DECA PFL Terms
| Term | Definition |
|---|---|
| Tax Break | a benefit offered by the government that reduces your total tax liability. More hidden on specific goods than sales tax. |
| Dividend | the percentage of a company's earnings that is paid to its shareholders as their share of the profits |
| Excise Tax | indirect tax charged by the government on the sale of a particular good or service, like gas. |
| Deductable | the amount of out of pocket money that the insured person must pay before their insurance policy starts paying for covered expenses. |
| Indemity | one party agrees to take liability for the other. ex: insurance |
| Copayment | amount of money that a patient with health insurance pays for each health care service |
| Insurance Premium | the amount you pay each month (or each year) to keep your insurance policy active |
| Investment Portfolio | Collection of Financial Investments held by an individual/instituton |
| Gross Profit | Revenue - COGS. Before Operating expenses/Interest/Taxes |
| Loan Origination Fee | 0.5-1% of Loan as a processing free |
| Asset Turnover | Total Revenue/Avg. Total Assets. Improve by optimizing Asset Utilization |
| Return on Assets (ROA) | Net Income/Avg. Total Assets. Profitability relative to total Assets |
| Brokerage Acc. | Investment Acc. @ Licensed Firm . Allows you to buy / sell securities |
| Securities | Any Investment |
| Margin Acc. | More purchasing & trading power, but the investment is the liability. So if u make more than the investment you make more money, if not its no loss to u |
| Cash Acc. | Traditional brokerage- you buy w what you deposit |
| Minimum Payment | The LEAST you can put on your credit card to keep good standing |
| Mortgage | Real Estate Loan |
| Money Market Acc. | Savings account w higher interest rate & higher minimum. Use for surplus of cash. Similar to HYSA |
| Overdraft Protection | Transfers money from a linked asset or line of credit |
| Payday Loan | Short-term, high cost loan u pay back on paydayyy |
| Current Ratio | Current Assets/Current Liabilities. 1.2-2 is GOOD |
| Net Profit Margin | % of ur revenue of that's profit |
| Home Equity Loan | Equity of ur house is collateral |
| Index Fund | You buy a little of every stock from an index (ex S&P 100). Safe bc if one goes down, your avg is fine, buy lower gains. Sold/bought when market is open. |
| Penison Plan | Its js a retirement plan. Ur employer sets aside money for u |
| Portfolio Diversification | Buying diff assets/sectors/geographies (like internationalll) |
| Personal Loan | ex for debt repayment or a big purchase, for you |
| Power of Attorney (POA) | Allowing someone else the authority to represent you legally/financially |
| Inflation | Higher prices, lower purchasing power |
| Interest Rate Risk | Higher Interest Rates = Lower Bond Value |
| Investment Grade Bonds | Safe for purchase, low risk low return |
| Junk Bonds | High risk high return |
| Large-Cap | Market Value over $10 billion, well established & stable ex Apple |
| Letter of Intent | Intent from investor to invest a certain amount over a certain time |
| Lipper Rating | By Lipper Analytical Services - divides funds into categories like growth & income funds w/ a 1-5 star rating |
| Loads | Front = fee when you buy, Back = fee when you sell, in mutual funds |
| Market Risk | Chance an investment won't reach financial goals |
| Maturity | Date a bond/note must be paid back |
| Bonds | you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year. |
| Maturity Distribution | Timeline (business side) on how to pay back bonds |
| Median Market Cap | Half stocks are above median, half are under, indicate worth |
| Recession | Two consecutive quarters of falling GDP |
| Redemption / Buyback | When a company buys it's own stocks back from people, usually for treasury stocks. |
| Fixed income fund | Funds that primarily invest in bonds |
| Fixed income securities | Regularly pays a fixed interest rate to you - ex: bonds, Treasury bills, and CDs |
| Green Bonds | Bonds to issue environmentally friendly projects |
| Green Bond Principles | Voluntary transparency guidelines for environmental stocks |
| Growth Stocks | appreciate steadily over time, carry moderate-high risk and return. - stock of company w/ rapid earnings and revenue. ex: Microsoft, Amazon, and Meta, along with innovators like Eli Lilly (healthcare), Tesla (EVs), and Shopify (e-commerce). |
| Growth Style Funds | Fund that focuses on growth stocks |
| Impact Investing | Generates income for social & environmental income, ex: aff. housing, education, or healthcare |
| Investment Stewardship | Clients get a say in what they want to invest in |
| Common Stock | Represent ownership in the company, high risk, but you get a say in shareholder meetings |
| Treasury stock / reacquired stock | previously issued, outstanding shares of stock which a company repurchased or bought back from shareholders. The reacquired shares are then regifted/distributed |
| Preferred Stock | Dividents paid before common, no voting rights, less risk in a company. |
| Dollar-cost averaging (Takes advantage of stock-price fluctuation) | putting a designated amount of money into an investment quarterly or monthly, allowing you to buy more shares when prices are low and fewer shares when prices are high. This keeps investors from worrying about purchase timing. |
| Diversification | Minimizes the effect of a single losing investment |
| Value Stocks | traded at a lower price than their fundamentals indicate they should be. |
| Treasury stock / reacquired stock | previously issued, outstanding shares of stock which a company repurchased or bought back from shareholders. The reacquired shares are then regifted/distributed |
| Value Stocks | traded at a lower price than their fundamentals indicate they should be. |
| Short-term horizon | Less then 5 yrs |
| Short-term horizon | Less then 5 yrs |
| Intermediate-term horizon | 5-15yrs |
| Likely consequence you might face if your identity is stolen: | Higher credit score -> higher auto insurance rates |
| Long-term horizon | 15+ yrs |
| Steps to Budgeting | Set your goals (short & long-term), identify income, expenses, and debt |
| Qulaitative Measures of a Business | business model, product mix, competition, and brand, subjective. |
| Quantitative measures of a Business | are objective and based on numbers of a business |
| Components of an Annual Report | For shareholders. Glossy, 4-color, General corporate informat, financial highlights, CEO Letter, , Management's discussion and analysis (MD&A), balance sheet, income statement, and cash flow statement, Auditor's report |
| Government Testing | Makes development of new products long / expensive. ex: takes from five to nine years to get most new drugs on the market because drug companies must meet the extensive testing requirements of the Food and Drug Administration |
| Steps to Budgeting | Set your goals (short & long-term), identify income, expenses, and debt |
| Unearned income | any income that comes from investments and other sources that are not related to employment |
| Mortgage | loan used to purchase real estate |
| Governmennt Licensing | process of issuing a government permit allowing a business to function in the marketplace |
| Personal liabiliy | any debts that an individual owes. |
| Personal assets | anything of value that a person owns that can be converted into cash. |
| Mortgage | loan used to purchase real estate |
| Governmennt Licensing | process of issuing a government permit allowing a business to function in the marketplace |
| Short-Term BOND MATURITY | Less than 3 yrs |
| Medium-Term BOND MATURITY | 4-10yrs |
| Long-term BONDS | Highest interest rate, more than 10 years |
| Investment-grade bonds | More likely to be paid on time |
| Non-investment grade bonds / High yeild / speculative bond | Higher interest rate, more risk |
| Coupon Payment | Fixed interest payment from a bond |
| Coupon Rate | Fixed interest rate on a bond, stays the same regardless of the market |
| Floating Bond Rate | Reset periodically (ex every 6 months) to adjust for market interest. Based on bond index (Treasury bond + 15, ect) |
| Zero-Coupon Bonds | Maturity is higher than initial purchase price, but no interest payments |
| Original Issue Discount | Face value = $800. Maurity value: $1000. OID: $200 |
| Risks of Corporate Bonds | Credit/default risk, inflation risk, liquidity risk, interest rate risk, call risk |
| Discount Broker | Does buy/sell orders for no comission on service. Big part of fintech. |
| Full service Broker | Does buy/sell orders w/ comission, provides advice, guidance, ect. |
| Savings and Loan Association / Thrift Institution | financial institution that specializes in accepting savings deposits and making mortgage and other loans. Community-focused. |
| Sales Finance Company | specialize in making loans to customers of a particular retailer or manufacturer, such as automobiles, furniture, or appliances |
| Stock Screener | investment tool used to filter thousands of stocks based on specific criteria—such as price, market cap, dividend yield, or P/E ratio—to identify potential investment opportunities. |
| Short-Term Disability Insurance | partial income replacement—typically 40% to 70% of base salary—if you cannot work due to a non-work-related illness, injury, or pregnancy. Benefits usually last 3 to 6 months (up to 1 year max) |
| Total Loss | If repair cost exceeds 70-80%, lender for your loan gets ACV minus deductable. |
| Total Rewards System | pay, benefits, and perks to attract, motivate, and retain talent in a company |
| beneficiary | reciever of assets (spouse, kids, charities, ect.) |
| noneconomic wants | love, friendship, fresh air, sunshine, and personal happiness |
| secondary market stocks | Investors buy & sell securities from each other, rather than the issuing company. |
| Stock Exchange | centralized, organized, and regulated marketplace to buy/sell stock |
| OTC Market | decentralized system where securities are traded directly between parties |
| Securities / Cap Table | illustrate who owns what percentage of a company securities at any given time.security types (common/preferred stock, options, warrants, SAFEs), shareholder names, number of shares owned, and percentage ownership. |
| stock mutual funds | Stock mutual funds pool money from multiple investors to purchase a diversified portfolio of stocks, managed by professionals to achieve specific goals like long-term growth |
| Bank Teller's Job | managing deposits, withdrawals, and loan payments, balancing cash drawers, and identifying, investigating, or reporting suspicious activity. |
| Pay Stub Info | gross pay, net pay, tax withholdings (federal, state, FICA), pre/post-tax deductions (benefits, retirement), and year-to-date (YTD) totals |
| W4 | Employee's Withholding Certificate, is to tell your employer how much federal income tax to withhold from your paychecks, ensuring it matches your tax liability to avoid owing taxes or getting a large refund at tax time. For EMPLOYERS |
| W2 | For EMPLOYEES, summarizes total annual earnings and taxes already withheld for tax filing |
| Skimming | a fraudulent, illegal practice where card data is captured via tampered ATMs or POS terminals, or cash is stolen before being recorded by a business |
| Churning | broker excessively trades securities in a client's account to generate commissions rather than to meet investment goals. |
| Corporate Report ex | Broader tha annual report and more voluntary |
| Components of a Business Plan | an executive summary, company description, market analysis, products/services, marketing/sales strategy, management team, and financial projections |
| whole life insurance | Fixed payments, gains cahs value overtime, matures at death |
| Refinancing Mortgage | replacing your current home loan with a new one, typically to secure a lower interest rate, change loan terms, or access home equity. |
| Cashier's Check | secure payment method guaranteed by a bank, rather than an individual. Funds are drawn from the bank's own account, making them ideal for large, secure transactions like real estate or car purchases. |
| Probate | court-supervised legal process of validating a deceased person's will, settling their debts, and distributing property to beneficiaries |
| Retail Bank | provide a variety of financial services, including savings and checking accounts for individuals |
| Holding / Parent Company | a business that owns the majority of another company's shares of stock. |
| Comprehensive Car Insurance | protects against damages from causes other than collision (e.g., fire, theft, water, falling objects, and vandalism |
| Collision Car Insurance | protects against damage to an insured's vehicle if they hit another car or lose control of their own car |
| Personal Injury Car Coverage | cover medical, hospital, and funeral costs of the insured, the insured's family, and other passengers in the insured's car in the event of an accident. |
| Liability Car Coverage | protects against loss as a result of injury to another person or damage to another person's property |
| Tax Ineffecient | a fund with a high portfolio rate replaces a high percentage of its investments every year. |
| High Portfolio Rate | Replaces a high % of investments every year. Every time that the fund sells one item in its portfolio and purchases another, a capital gain or loss is being realized |
| Endorsements on Insurance | Addition to the base insurance. Common endorsements to homeowners insurance policies cover earthquake damage, sewer backup, home businesses, etc. |
| Renters Insurance | A type of House Insurance |
| Credit Union | a nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates to individuals who meet its enrollment requirements. |
| Brokerage Company | acts as an intermediary to facilitate securities transactions, such as the buying and selling of stocks, for the general public. |
| Taxable income calculation | calculated based on taxable income, marital status, and claimed allowances |
| Roth IRA | NOT Tax Deferred - You contribute post-tax, but don't pay when you withdraw. Ideal if your tax bracket is low now, but will be high later. |
| Implied Warranty | If it comes with a feature, you have the right to assume it will work. |
| Limited Warranty | Time-bound warranty, unlike full |
| Federal Trade Commission (FTC) | protects the public from unfair and deceptive practices in advertising. |
| Securities and Exchange Commission (SEC) | government organization that protects investors and safeguards the integrity of the securities market. |
| The Office of the Comptroller of the Currency (OCC | ensures national banks provide fair access to financial services. |
| U.S. Consumer Financial Protection Bureau | regulates the offering of consumer financial products and maintains a complaint database |
| Relationship between a creditor and a debtor is based on... | Based on the ability to pay |
| Direct subsidized student loans | loans are loans that are available to undergraduate students that demonstrate financial need. U.S. Department of Education covers interest while you are in school and for the first 6 months after you graduate. |
| Direct unsubsidized loans | available to undergraduate and graduate students, do not require students to demonstrate financial need, and start accruing interest immediately. |
| In a Life Insurance Application | Your lifestyle habits (smoking, exercise, diet, etc) and date of birth |
| Bnefit of a large down payment | reduces the amount of interest that will be charged over the loan period. |
| Target Date Mutual Fund | Serves as an all-in-one portfolio, lets you invest mix of several different types of stocks, bonds, and other investments, gets more conservative the closer you get to retirement. |
| Capital Appreciation | Your assets increase in value over time, so |
| Phishing | online identity theft scam that fools its victims into believing they are submitting sensitive, personal information such as bank or credit card numbers to a legitimate website. |
| Ponzi Scheme | investment scam that lures new investors by promising high rates of return with little to no risk. |
| Accounting Fraud | when a company or organization knowingly publishes incorrect information on its financial statements |
| Affinity fraud | an investment scam in which the scammer claims to be a member of the group they are targeting. |
| FTC Cooling Period | 3-day cooling period after signing purchase contract where they can cancel |
| Consumer Product Safety Commission | sets product safety standards and requires producers to test their products. It also maintains its website so consumers can report unsafe products direc |
| Electronic Data Gathering and Retrieval (EDGAR) | Check before purchasing stock. |
Created by:
spro_ut