econ unit 4
Card Set Information
econ unit 4
A business owned and run by one person.
The owner is personally and fully responsible for all losses and debts of the business
A stock of finished goods and parts in reverse-to keep satisfy customers or to keep production flowing smoothly.
Meaning that the firm legally ceases to exist when the owner dies,quits,or sells the business.
A business jointly owned by two or more persons.
The limited parnters have limited liability(meaning that the investor's responsibility for the debts of the busines is limited by the size of his or her investment in the firm)
A court-granted permission to an individual or business to cease or delay debt payments.
a form of business organization recognized by law as a seperate legal entity having all the rights of an individual.
a government document that gives permission to create a corporation.
ownership certificates in the firm
stockholders or shareholders
investors that by the shares or stock
a check representing a portion of the corporate earnings to each stockholder.
a written promise to repay amount borrowed at a later date.
The amount that is borrowed (by use of bonds)
The price paid for the use of another's money
Feature of taxation that allows stockholders' dividends to be taxed both as corporate profit and as personal income.
absence of spending
the dllars that become available when people abstain from consumtion
a network of savers, investors, and financial institutions that work together to transfer savings to investors.
certificates of deposit
a receipt showing an investor has made an interest-bearing loan to a bank-or a government or corporate bond.
claims on property and the income of the borrower.
finacial institutions that lend the funds that savers provide to borrowers
Nonbank financial institutions
nondepository institutions that channel savings to borrowers.
a firm that specializes in making loans directly to consumers ans in buying installments contracts from merchants who sell goods on credit.
bill consolidation loans
a loan consumers use to pay off other bills
The price insured pays for this policy and is usually paid monthly,quarterly,or annually for the length of protection
a company that sells stock in itself to individual investors and then invest the money it recieves in stocks and bonds issued by other corporations
net asset value (NAV)
the net value of the mutual fund divided by the number of shares issued by the mutual fund
a regular pament intended to provide income security to someone who has worked a certain number of years,reached a certain age,or has suffered a certain kind of injury
real estate investment trust (REIT)
a company organized primarily to make loans to construction companies that build homes
a situation in which the outcome is not certain,but probabilitys for each outcome can be estimated
a tax-deferred investment and savings plan that acts as a personal pension fund for employees
the stated interest of the bond
the life of the bond
the principal or the total amount initially borrowed that must be repaid to the lender at maturity
the annual interest divided by the purchase price
municipal bonds (munis)
are bonds issued by stae and local governments
meaning that the federal government does not tax the interest paid to investors.
are low-denomination, nontransferable bonds issued by the united state government,usually through payroll-savings plans
united states government obligations with maturitities of two to 10 years.
have maturities ranging from 10 to as many as 30 years.
a short-term obligation with a maturity of 13, 26, or 52 weeks and a minimum denomination of $1,000
Individual retirement accounts (IRAs)
are long-term, tax-sheltered time deposits that an employee can set up as a part of a retirement plan
Roth IRA(Individual retirement account)
An IRA whose contributions are made after taxes so that no taxes are taken out at maturity.
a market where the money is oaned for more than one year.
a market where the money is loaned for periods of less than one year
a market wher only the original issuer can repurchase or redeem a financial asset.
a market in which exsisting financial assets can be resold to new owners
Stocks that represent ownership shares in corporations.
Efficient market Hypthesis (EMH)
The argument that stocks are always priced about right and that bargains are hard to find because they are followed closely by so many
The practice of holding a large number of different stocks
so that increases in some can offset unexpected declines in others.
place where buyers ans sellers meet to trade securities
membership,that allow access to the trading floor
Over-the Counter market (OTC)
an electronic marketplace for securities that are not trade
on an organized exchange.
Dow-Jones Industrial average (DJIA)
widely publicized measure of stock market performance on the NYSE.
Standar & poor;s 500 (S&P 500)
A measuring of stock that uses the price changes
of 500 representative stocks as indicators of overall market performance.
a “Strong” market with the prices moving up for
several months or years in a row.
a “Mean” market, with the process of equities falling sharply for several months or years in a row
a market in which a transaction is made immediately at the
an agreement to buy or sell at a specific date in the future at a predetermined price.
the marketplaces in which futures contracts, or “futures,” are brought and sold.
are contracts that provide the right to purchase and sell commodities or financial assets at some point in the future at a price agreed upon today.
the right to buy a share of stock at a specified price some
time in the future.
the right to sell a share of stock at a specified price in the future.
are the markets in which options are traded.