Chapter 19 - Personal Finances Flashcards
currency
coins and paper money
long-term credit
an advance of money to be repaid in installments over a long period of time
short-term credit
an advance of money to be repaid within a short period of time
bankruptcy
a legal declaration that a person or business cannot pay his or her or its debts
creditors
people who are owed money
collateral
property used to guarantee that a loan will be repaid
savings and loan associations
banks originally established to help people buy homes
Federal Reserve System
the US banking system that handles the baking needs of the federal government and regulated the money supply
discount rate
the rate of interest charged by Federal Reserve Banks on loans to member banks
discounting
the practice of deducting interest on a loan before money is given to the borrower
credit unions
banks that are operated by their members to create a pool of money for low-interest loans
certificates of deposits (CDs)
investments in which an amount of money invested for a specified period of time earns a guaranteed rate of interest
brokers
brokerage house employees who but and sell stock
stock exchange
a market where stocks are bought and sold
mutual funds
investments that reduce risk to shareholders by investing in many different stocks
money market funds
investments that are similar to a mutual fund but do not guarantee a specified amount of interest and are not insured by the government
insurance
a system of protection in which people pay small sums periodically to avoid the risk of a large loss
premium
a payment made for insurance protection
private insurance
insurance individuals and companies voluntarily pay to cover unexpected losses
beneficiary
the person named in an insurance policy to receive the amount of the policy when the policyholder dies
social insurance
government programs that are meant to protect individuals from future hardship and that individuals and businesses are required to pay for by state and federal laws
Social Security
a system of government insurance that provides benefits for retired people, people with disabilities, unemployed people, and people with job-related injuries and illnesses
Medicare
a federal program of health insurance for people age 65 or older
Medicaid
a federal program that helps the states pay the medical costs of low-income people
