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