Set 1 Vocab Flashcards
(32 cards)
Dodd-frank Wall Street reform and consumer protection act
A compendium of federal regulations, primarily affecting financial institutions in their consumers, that the Obama administration passed in 2010 in an attempt to prevent the reoccurrence of events that calls the 2008 financial crisis. The Dodd Frank Wall Street reform and consumer protection act commonly referred to as simply “Dodd Frank quote is supposed to lower risk in various parts of the US financial system. It is named after US representative Barney Frank and US senator Christopher j. Dodd. because of their involvement in the creation of passage of the acts
Preference share
Company stock dividends that are paid to shareholders, before common stock dividends are paid out. In the event of a company bankruptcy, preferred stock shareholders have a right to be paid company assets first. Preference shares typically pay a fixed dividend where as common stocks do not. Unlike common shareholders, preference shareholders usually don’t have voting rights. Also referred to as preferred stock.
Market value
The price and as it would fetch in the marketplace; commonly used to refer to the market capitalization of a publicly traded company, and it’s obtained by multiplying the number of outstanding shares by the current share price. Easiest to determine for exchange traded instruments (stocks and futures) since their market prices are widely disseminated and easily accruable, but is a little more challenging to ascertain for over-the-counter instruments like fixed income securities.
Asset class
A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. The three main asset classes are equities (stocks), fixed income (bonds), and cash equivalents (money market instruments).
Equity financing
The process of raising capital through the sale of shares in an enterprise. Equity financing is essentially refers to the sale of an ownership interest to raise funds for business purposes. Equity financing spans a wide range of activities in scale\Scope from a few thousand dollars, raised by an entrepreneur, to giant initial public offering’s running into the billions. Generally associated with financing large public companies, it also includes financing by private companies
Credit union
Member – own financial co-op. These institutions are we created and operated by its members and profits are shared amongst the owners. As soon as you deposit funds into a credit union account you become a partial owner and participate in the unions profitability.Credit unions are formed by large corporations and organizations for their employees and members.
Loan to value ratio
A lending risk assessment ration that financial institution and other lenders examined before approving a mortgage. Typically assessments with high LTV ratios are generally seen as high-risk, and therefore, if the mortgage is excepted the loan will generally costs the borrower more than he or she will need to purchase mortgage Insurance
Tangible net worth
A measure of the physical worth of the company. Doesn’t contain intangible assets. Calculated by taking a firm’s total assets and subtracting the value of all its liabilities and “tangible “assets.; The sum of all your tangible assets less only the liability you have
Marginal utility
The additional satisfaction of consumer games from consuming one more unit of a good or service. Used to determine how much of an item consumers will purchase.
Positive; consumption of an additional item increases the total utility
Negative; consumption of additional item increases the total utility
Individual retirement account
And investing tool used by individuals to earn in earmark funds for retirement savings. Therefore there are several types of IRAs. Traditional, Roths, SIMPLEs and SEPs. Traditional and Roth IRA’s are established by individual tax payers who were allowed to contribute 100% of compensation up to a dollar amount. SEPs and SIMPLEs are retirement plans are established by employers and individual participant contributions are made to these types of retirement accounts
Monopolistic market
A type of market that be just one, if not all, of the traits of a monopoly such as high-priced levels, supply constraints, or excessive barriers to entry. Because this type of market would be comprised of one supplying firm, without proper legislation or controls, this firm possesses the power to raise prices without adversely affecting the sale of its products/services. This type of market stands in contrast to a perfectly competitive market
401(k) plan
A savings account established by your employer that is specifically for retirement savings. The money you put into your 401(k) is not taxed until you use it. Some employers will “match” some of the money you put into the 401(k). This is equal to one dollar from you equals one dollar from your employer
Elasticity of supply
A measure of the responsiveness of the quantity supplied to price changes calculated by dividing the percent change in the quantity supplied by the percent change in the price
Elasticity of demand
A measure of how strongly consumers respond to a change in the price of a good, calculated as a percentage change in quantity demanded divided by the percentage change in price.
Income effect
The change of an individual’s or a calm as income and how that change will impact the quantity demanded of a good or service. The relationship between income and the quantity demanded is a positive one, as income increases, so does the quantity of goods and services demanded
fiat money
Currency that a government has declared to be legal tender but is not back by physical commodity. The value is derived from the relationship between supply and demand. Rather than the material that the money is made of Fiat money is based solely on faith.
Fiat is Latin for “it shall be”
Securitization
The process through which an issue were creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. The process can encompass any type of financial asset and promotes liquidy (the degree to which an asset or security can be bought or sold without affecting the price.) In the marketplace. Mortgage-backed security’s are perfect
Debt financing
When I fart raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual in front/or institutional investors. In return for lending the money, the individuals front/institutions become creditors and receive a promise that the principal and interest on the debt will be repaid.
Bank draft
A type of check for the payment is guaranteed to be available by the issuing bank. Typically, banks will review the bank draft request his account to see if sufficient funds are available for the check to clear. What’s it has been confirmed that the sufficient funds are available the bank affectively set aside the funds for the person’s account to be getting out with the bank draft is used. Thank dress are normally involved in transactions involving large sums of money/situations were trust communication.
Amortization
The a motivation of a long refers to a payment plan set up to allow the borrower to pay off the total amount owed, including interest charges, the regular payments. For example, Car loans are commonly Amortized for five years and mortgages are commonly amortized for 30 years.
Installment credit
This is a form of credit where you pay the money owed back in installments. A car loan is an installment loan because you make payments for each month
Accured interest
1-A term used to describe an accrual accounting method when interest, that is either payable receivable has been recognized, but not yet paid or received. Occurs as a result of the difference in timing of cash flows.
2-The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date
Market failure
And economic term that encompasses a situation where in any given market the quantity of the product demanded by consumers does not equate to the quantity supplied by suppliers. This is a direct result of the lack of certain economically I do factors, which prevents equilibrium. Market failures have negative effects on the economy because an optional allocation of resources is not attained. In other words, the social cost of producing a good or service (all the opportunity cost of the input resources used in it’s creation) are not minimized, And this results in a waste of some resources.
Bond
A form of saving where you provide money to the government or corporation of a specified amount of time in return for interest paid by the organization issuing the bond you will not have access to your money while it is in the bond, but this could be a good place to stash money that you don’t currently need.
