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Financial Lit
vocab
| Question | Answer |
|---|---|
| Credit | Money borrowed to buy something now with the agreement to pay it later |
| service credit | an agreement to have a service preformed now and pay for it later |
| Usury laws | laws setting max interest rates that may be charged for loans |
| pawnbroker | A legal business that makes high-interest loans based on the calue of personal prossessions pledged as collateral |
| line of credit | A pre-established amount that can be borrowed on demand with no collateral |
| deferred billing | A service to credit customers whereby purchases are not billed for several months |
| loan sharks | unliscenced lenders who charge illegally high interest rates |
| open-ended credit | An agreement to lend the borrower an amount up to a stated limit and to allow borrowing up to that limit again, whenever the balance falls below the limit. |
| close-end credit | A loan for a specific amount that must be repaid, in full, including all finance charges, byu a stated due date. |
| capital | Property owned that is worth more than the owner's debt. |
| collateral | property pledged to assure repayment of a loan |
| finance charge | total dollar amount of an interest and fees you pay for the use of credit |
| Annual Percentage rate | the cost of credit expressed as a yearly percentage |
| debt collector | a person or company hired by a creditor to collect the overdue balance on an account |
| credit bureau | a business that accumulates stores and sells credit info to business subscribers |
| capacity | A responsible attitude toward licing up to agreements, often judged on evidence in the person's credit history |
| credit history | A complete record of a person's borrowing and repayment preformance. |
| discrimination | treating perople diferently based on predjuice rather than individual merit |
| credit rating | a measure of creditworthiness based on an analysis of the consumer's financial history |
| title | a legal document that establishes ownership |
| closing costs | the ecpenses incurred in transferring ownership from buyer to seller in real estate transaction |
| Multiple Listing Service (MLS) | A real estate marketing service in which agents from many real estate agencies pool their home listings and agree to share comissions on the scales |
| market value | highest price that a property will bring on the market |
| fixed-rate-mortgage | mortgage on which the interest rate doesn't change during the term of a loan |
| acceptance | formal agreement to terms of an offer, forming contract between the parties |
| deed | legal doc that transfers the title of real property from one party to another |
| offer | formal doc that expresses interest in entering into a contract with someone else |
| equity | difference between the market value of property and the amount owed on it |
| counter offer | an offer in response to another offer |
| ernest money | portion of the purchase price that the buyer deposits as evidence of good faith to show that the purchase offer is serious |
| lein | financial claim on property |
| adjustable-rate mortgage (ARM) | mortgage for which the interest rate changes in response to movement of interest rates in the economy as a whole |
| points | mortgage finance charge paid by the borrower at closing with each point being equal to 1 % of the loan amount |
| dormitory | on campus building that contains many small rooms that colleges rent to students |
| housing co-ops | same idea as a dorm but you're responsible for cleaning, maintenence, and cooking in exchange for a lower rent |
| efficency apartment (studio apartment) | one large room that acts like a kitchen, living room, bedroom, and dining room |
| townhouse | 2 story apartment |
| deposit | at least one months rent amount in case of renter moving out with out paying or damaging the property. Secures your apartment. |
| duplex | a building with two separate living units |
| condo | individually owned apartment style homes with shared ownership of a common area |
| security deposit | refundable amount paid in advance to protect the owner against famage or non-payment |
| landlord | owner of the rental property |
| tenant | person who rents from the landlord |
| lease | written agreement that allows a tenant to use property of a specified period and rent |
| Fee | non refundable charge for a service |
| discount bond | A bond purchased for less than its maturity value |
| annuity | contract sold by an insurance company that provides the investor a series of regular payments, usually after retirement |
| diversification | an investment strategy for spreading risk among different types of investments |
| investing | the use of savings to earn a financial return |
| inflation | a rise in the general level of prices |
| risk | the chance that an investments value will decrease |
| annual report | An SEC-required summary of a corporation's financial results for the year and prospects for the future |
| stock | a unit of ownership in a corporation |
| financial advisor | professional investment planners who are trained to give investment advice |
| bond | an investment that represents the debt of a company or a government |
| mutual fund | a professionally managed group of investments brought using a pool of money from many investors |
| futures | contracts to buy and sell commodities or stocks for a specified price on a specified date in the future |
| option | the right, but not obligation, to buy or sell a commodity or stock for a specified date in the future |
| penny stocks | low priced stocks of small companies that have no track record |
| Rule of 72 | Technique for estimating the number of years required to double your money at a given rate of return |
| liquidity | the ability of an asset to be converted into cash quickly without loss of value |
| maturity date | the date on which an investment becomes due for payment |
| interest | money paid by a financial institution for the use of the saver's money |
| share account | a savings account at a credit union |
| principle | a sum of money in a savings account on which interest is earned |
| compound interest | interest computed on the principle plus accumulated interest |
| discretionary income | the amount of money left over after the bills are paid |
| stockbroker | a person who buys and sells securities for investors |
| money market account | a combination savings-investment plan in which the money deposited is used to purchase safe liquid securities |
| certificate of deposit (CD) | A deposit that earns a fixed interest rate for a specified length of time |
| securities | stocks and bonds issued by corporations or by the government |
| annual percentage yield (APY) | The actual interest rate an account pays per year with compounding included. |
| estate | all that a person owns, less debt owed, at the time of the person's death |
| defined-benefit plan | a company-sponsored retirement plan in which employees recieve, at a normal retirement age, a specified amount based on wages earned and number of years of service |
| reverse mortgage | a loan against the equity in the borrower's home in which the lender makes tax-free monthly payments to the borrower |
| individual retirement account (IRA) | a retirement savings to set aside up to $2,000 per year and delay paying tax on the earnings until they begin withdrawing it at age 59.5 or later |
| will | a legal document that tells how a decedent wished his or her property to be distributed after death |
| heirs | people who recieve property from someone who has died |
| heirs | people who recieve property from someone who has died |
| trust | a legal document that empowers a trustee to control property for ultimate distribution to a beneficiary |
| estate tax | a federal tax on property transferred from deceased people to their heirs |
| inheritance tax | a state tex on a heir who recieves oproperty from a deceased person's estate |
| keoogh plan | a tax-deferred retirement savings plan avaliable to self-employed individuals |
| defined-contribution plan | A company-sponsored retirement plan in which employees may choose to contribute part of their salary as a tax-deferred investment |
| estate planning | preparing a plan for transferring property during one's lifetime and at one's death |
| codicil | a legal document that makes small changes to a will |
| power of attorney | a legal document authorizing someone to act on your behalf |
| gift tax | a tax on a gift of money or property, to be paid by the giver, not the reciever of the gift. |
| insurance | a method of spreading individual risk among a large group of people to make losses more affordable for all. |
| personal risks | the chances of loss involving your income and standard of living |
| pure risk | a chance of loss with no chance for gain |
| rish management | an organized strategy for controlling financial loss from pure risks |
| risk reduction | the risk-management technique that involves taking measures to lessent the frequency or severity of losses |
| probability | the mathematics of chance; the likelihood that something will happen |
| risk | the chance of financial loss from perils to people or property |
| property risks | the chances of loss or harm to personal property or real estate |
| liability risks | the chance of loss that may occur when your errors or inappropriate actions result in bodily injury to someon else or damage to someone else's property |
| speculative risk | a risk that may result in either gain or loss |
| risk avoidance | the risk-management technique of eliminating the chance for loss by not doing the activity that could result in the loss. |
| risk assumption | the risk-management technique of establishing a monetary fund to cover the cost of a loss |
| indeminification | outting the insured back in the same financial condition as before the loss occured |
| insurable interest | any financial interest in life or property such that, if the life or property were lost or harmed, the insured would suffer financially. |
| insurer | a business that agrees to pay the cost of potential future losses in exchange for regular fee payments |
| policy | a written insurance contract |
| premium | a fee usually paid at regular intervals to an insurer for an insurance policy |
| policyholder | the person who owns an insurance policy |
| pre-approval | finding out how much money you will be qualified to borrow before making a purchase |
| VIN (Vhecile identification number) | how you can learn the history of a car |
| lemon | a car with substantial defects that the manufacturer has been unable to fix after repeated attempts |
| lemon laws | allow you to get a new car or your money back |
| lisense tag fee | fee paid for emissions testing and tag fee |
| title | a legal document that establishes ownership |
Created by:
gabgab10
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