Question | Answer |
Define Saving | The non-use of income for a period of time so that it can be used later |
Define how saving benefits the economy as a whole | Saving provides money for others to invest or spend. Additional saving allows business to expand which provides increased income for consumers and raises the standard of living. |
Interest | Is the payment people receive when they lend money |
Passbook Account (PSA) | Book which deposits, withdrawls and interest are recorded |
Statement Savings Account (SAA) | Savings account where you receive a statement each moth showing every transaction. -Low interest and no minimum balance |
Money Market Deposit Account (MMA) | Account that pays high amounts of interest and allows immediate access to money. -high interest but requires a minimum balance |
Certificates of deposit (CD) | Requires a minimum balance and an alloted for when you can actually take out money. |
Maturity | Period of time one must leave their money in an account which can vary from 7 to 8 years. |
F.D.I.C | Federal Deposit insurance corporation |
What determines the rate of interest on a time deposit? | the length of the maturity, the longer the money is untouched the higher the interest |
Define Stock | Buying stock means becoming a part owner of a corporation, and entitles the buyer to future profits and assets. |
Define Dividends | the money returned to a stockholder on the amount he/she originally invested in the company |
Bond | A certificate a company or gov't issues in exchange for borrowed money. |
tax-exempt bonds | the interest is not taxed by the federal gov't. good investment for wealthy people who would usually pay high taxes through other investments. |
Savings bonds | Buyer pays half the face value and the bond increases in value every 6 months until its full face value is met. |
Treasury Bills | a minimum of $10,000 in investments and can mature between 3 months to a year. |
Treasury notes | maturity date of 2 to 10 years |
Treasury Bonds | mature in 10+ years. |
NYSE | New York Stick Exchange-largest stock market |
AMEX | American stock exchange-also in NY |
NASDAQ | National Association of Securities dealers automated quotations.-national market system |
Over the counter market is.. | aren't traded in any specific place; Brokerage firms hold quantities of shares of stock that they buy and sell for investors. |
Capital Gains and Losses | The price a stock holder sells a share will determine whether it is a gain or a loss. selling for more than you buy would be a gain where selling for less than you bought it for would be a loss.-duhh |
Mutual Fund | Investment company that pools the money of many individuals to buy stocks, bonds or other investments. |