Economics Chapter 6 Flashcards
certificate issued by a company or the government in exchange for borrowed money
bond
increase in the value of an asset from the time it was bought to the time it was sold
capital gain
time deposits that state the amount of the deposit, maturity, and the interest being paid
certificates of deposit
a person who acts as a go-between for the buyers and sellers of stocks and bonds
broker
decrease in the value of an asset from the time it was bought to the time it was sold
capital loss
spreading investments into several types of accounts to lower overall risk
diversification
money return a stockholder receives on the amount originally invested in the company by purchasing stock
dividends
payment people receive when they lend money, allowing someone to use their money
interest
period of time at which time deposits will pay a stated rate of interest
maturity
account that pays relatively high rates of interest, requires a minimum balance and allows immediate access to money
money market deposit account
private retirement account that allows individuals or married couples to save a certain amount of their earning per year
individual retirement account (IRA)
retirement plan that allows the self-employed to save up to 15% of their annual income and deduct it from their income
Keogh Plan
type of mutual fund that uses investors’ money to make short term loans businesses and banks
money market fund
investment company that pools the money of many people to buy investments
mutual fund
nonuse of income for a certain period of time for later use
saving
share in ownership of the corporation issuing stock
stock
bonds sold by local and state govts. the interest on which is not federally taxed
tax-exempt bonds (aka municipal bonds)
bonds issued by the federal government as a way of borrowing money
savings bond
savings plans that require their depositors to leave their money on deposit for a certain period of time
time deposits
certificates issued by the US Treasury in exchange for borrowed money in min. amounts of $10000 maturing in 3 months to 1 year
Treasury Bills
certificates issued by the US Treasury in exchange for borrowed money in min. amounts of $1000 and $5000 maturing 10+ years
Treasury Bonds
certificates issued by the US Treasury in exchange for borrowed money in min. amounts of $1000 and $5000 maturing in 2-10 years
Treasury Notes
company plans that provide for retirement income
pension plan
purchase and sale of stocks and bonds, often of smaller lesser-known companies which takes place outside the normal stock exchanges
over-the-counter market
