Banking and Finance Flashcards
Personal financial planning
Arranging to spend, save, and invest money to live comfortably, have financial security, and achieve goals
Values
The beliefs and principles you consider important, correct, an desirable
Opportunity cost
What is given up when making one choice instead of another
Inflation risk
If you to buy a car until next year, you accept the possibility that the price may increase
Interest rate risk
Interest rates go up or down, which may affect the cost of borrowing or the profits you earn when you save or invest
Income risk
You may lose your job due to unexpected health problems, family problems, an accident, or changes in your field of work
Personal risk
Driving for eight hours on icy mountain roads may be hazardous. The risk may not be worth the money you save on airfare
Liquidity risk
Some long-term investments, such as a house, can be difficult to convert quickly
Service
A task that a person or a machine performs for you
Good
A physical item that is produced and can be weighed or measured
Economics
The study of the decisions that go into making, distributing, and using goods and services
Economy
Consists of the ways in which people make, distribute, and use their goods and services
Supply
The amount of goods and services available for sale
Demand
The amount of goods and services people are willing to buy
Inflation
The rise in the level of prices for goods and services
