Vocab quiz Flashcards
(25 cards)
Compound Interest
interest earned on both the principal amount and any interest already earned.
Finance
The science of the management of money and other assets; the management of money, banking, investments, and credit.
Future Value
What an amount invested today at a particular interest rate will be worth in the future.
Risk
Degree of uncertainty of return on an asset; the possibility of loss.
Bank
a depository institution where one can keep and borrow money and take care of financial affairs
Credit Union
a cooperative nonprofit financial institution that is privately owned and controlled by its members. Provides depository and lending services to its members
FDIC
(federal deposit insurance corp) an agency of the US that promotes public confidence in the financial system by insuring deposits in banks and thrift institutions
Federal Reserve
central bank of the US. The Fed incorporates 12 fed reserve branch banks located in major cities across the nation along with all national banks all start chartered commercial banks and some trust companies. It helps to regulate the US monetary and banking system.
Financial Advisor
A professional who provides financial planning and advice on financial matters.
Financial literacy
ability of individuals to make appropriate decisions in managing their personal finances.
Financial services industry
Financial institutions that help consumers, businesses, and governments manage money, these institutions can be depository or not.
Insurance company
a financial institution that protects persons against the risk of financial loss.
Interest
a fee paid for the use of money over time. In other words, its the cost of borrowing money. Interest is often expressed as a percentage of the amount borrowed
Present value
the value of a future cash stream discounted at the appropriate market interest rate
Simple interest
the amount of interest based on a principle amount and not on earned interest
Time value of money
money’s potential to grow in value over time; the relationship between time, money, a rate of return, and earnings growth
Annuity
a type of investment where money is exchanged for a series of equal payments over time. Payments can include interest on the original sum plus income for investments. Annuities are sold by life insurance companies and are often purchased to provide retirement income and shift the responsibility for investing to an investment company
Bond
A loan an investor makes to a government or corp for a specified amount of time for the purpose of raising capital for the government or corp. In return the investor receives the principal plus interest.
Capital
The financial resources that are used to make money, which can take the form of equity or dept
Financial intermediary
An institution that provides a service for those who have extra money to save or lend and channels it to those who wish to invest or borrow
Mutual funds
Investment products that combine the money from a large group of investors to buy stocks and other investments.
Pension funds
Financial products that specialize in gathering payments into retirement funds and investing those payments so that they can accumulate to provide income at retirement
Savings and loan associations
depository financial institutions that specialize in home mortgage loans.
Stock
A share of ownership in a company
