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A Certificate of Deposit
A document showing that an investor has made an interest-bearing loan to the bank.
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Insurance Premium
The price the insured pays for this policy.
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Municipal Bond
Bonds issued by state and local governments.
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How much do you pay for a $50 savings bond?
You pay $25
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What is the difference in a bull market and a bear market?
A bull market moves up, a bear market declines.
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What is the Dow (DJIA)?
Measure of stock market performance based on 30 representative stocks.
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What is the S&P 500?
Measure of stock market performance based on 500 stocks traded on the NYSE, AMEX, and OTC market.
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Saving
Absence of spending
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Savings
The dollars that become available when people abstain from consumption.
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Financial Assets
A stock or other document that represents a claim on the income and property of a borrower
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The Life Insurance Company
A non-bank financial institution set up to provide financial protection for survivors of the insured
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Premium
The price the insured pays for the length of the protection. Life Insurance, health insurance, car insurance all pay premiums.
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Bond
A formal long term contract that requires repayment of borrowed money and interest on the borrowed funds at regular intervals over time.
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Junk Bonds are...
exceptionally risky
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Par Value
the total amount borrowed
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Secondary Market
A market, where existing financial assets can be resold to new owners
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Municipal Bonds are usually a ____ investment
Safe
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Savings Bond
Low denomination, nontransferable bonds issued by the U.S. government that are also called EE savings bonds. (Bonds range from $50-$10,000 and they are purchased at the 1/2 the face value.)
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Treasury noted are U.S. government obligations with maturities of...
2-10 years
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Treasury bonds have maturity dates ranging from more than...
10-30 years
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Notes and Bonds both come in denominations of ...
$1000
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Treasury Bills or T-Bills
Short term U.S government obligation with a maturity of one-year or less in denominators of $1000.
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Most stocks in the United States are traded on the...
Over-the-counter market
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A stock transaction that is made immediately at the market price is made in the...
Spot Market
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Financial Asset
Claims on the property and income of the borrower
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Beneficiary
Someone who inherits the ownership of the financial assets if the purchaser dies
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Bull Market
A strong market with prices moving up for several months or years in a row.
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Current Yield
The annual interest divided by the purchase price
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Equities
stocks that represent ownership shared in corporations
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Stock Broker
a person who buys or sells equities or stocks
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Risk
a situation in which the outcome is not certain but the probabilities of different outcomes can be estimated
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Money Market
a market where money is loaned for periods of less than one year.
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Call Option
The right to buy something at a specific future price
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Over-the-Counter Market (OTC)
an electronic marketplace for securities that are not traded on an organized exchange such as NYSE.
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The most common OTC market is...
NASDAQ
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Pension
A regular payment intended to provide income security to someone who has worked a certain number of years, reached a specific age, or suffered an injury.
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401K Plan
A tax deferred investment and savings plan that acts as a personal pension fund for many employees . This comes from a payroll deduction.
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Tax-deferred
Before taxes or this money has not been taxed
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Portfolio Diversification
Is holding a large number of stocks so that increases in some will offset unexpected declines in others.
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This is known as being Tax-exempt...
When the government does not tax interest paid on an investment.
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Put Option
The right to sell something at a specific future price
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Bear Market
Market in which prices of equities decline for several months or years.
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Finance Company
A firm that makes loans to consumers and buys installment contracts from merchants who sell goods on credit.
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Capital Market
A market where money is loaned for more than one year
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Mutual Fund
A company that sells stock in itself to individual investors and then invests the money in stocks and bonds of other corporations.
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Standard & Poor's 500 (S&P 500)
A popular benchmark of stock performance that uses the prices changes of 500 representatives stocks as an indicator of overall market performance.
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