Q2: ALL Flashcards
When the interest due at the end of a certain period is added to the principal and that sum earns
interest for the next period, the interest paid is called
compound interest
sequence of payments made at equal or fixed intervals or periods of time
annuity
the time between successive payments
payment interval
an annuity where the payment interval is the same as interest period
simple annuity
an annuity where the payment interval is not the same as the interest period
general annuity
a type of annuity in which the payments are made at the end of each payment interval
ordinary annuity or annuity immediate
a type of annuity in which the payments are made at beginning of each payment interval
annuity due
an annuity in which payments begin and end at definite times
annuity certain
an annuity in which the payemnts extend over an indefinite length of time
contingent annuity
time between the first payment interval and last payment interval
term of an annuity
the amount of each payment
regular or periodic payment
sum of future value of all the payments to be made during the entire term of the annuity
future value of an annuity or amount of an annuity
sum of present values of all the payments to be made during the entire term of the annuity
present value of an annuity
is an annuity in which the first payment is not made at the beginning nor at the end of the payment interval, but at a later date.
deferred annuity
The length of time when these payments are made is called the ______
period of deferment/ period of deferral.
is a debt contract entered into by two parties, an organization or an individual, through a note which states the principal amount, interest rate, the mode of payment including the date of payment.
Financial Loan
is a loan given to customers for personal, family, or consumable items such as a car and home.
consumer loan
is debt that the company is required to pay according to the loan’s terms and conditions.
business loan
It is an asset presented by a borrower that is pledged to be given to the lender in case the borrower defaulted on the loan or failed to pay back the loan.
collateral
An individual who agrees to pay back a loan if the borrower fails to pay the loan on time.
guarantor
is a paper issued to a shareholder which shows on its face the number of shares it represents.
stock certificate
type of stock for which stockholders get first choice in distributed profits. Owners are guaranteed a fixed dividend for as long as they own stock.
preferred stock
the ordinary stock of a corporation, paying no specified rate or amount of dividend. Owners usually comprise more than half of the totality of the company’s stocks.
common stock
earnings distributed to shareholders of a corporation
dividend
amount of interest
dividend
the face value of a bond or stock
par value
The basis for calculating the interest to be paid.
par value
the price at which a stock or bond is sold.
market price
is the market place for stocks
exchange
is the weighted average value of a group of a specific investment tool. It is used to describing the stock market.
market index
is a measure used by investors and finance specialist to describe the stock market.
stock market index
stock sold before it is available on a stock exchange.
initial public offering
is a form of long-term promissory note issued by a corporation or government in exchange for a sum of money.
bonds
the interest rate the bond issuer will use in computing the interest payment, usually expressed in percentage.
dividend rate
Also called, the Yield.
dividend rate
are interval dates, usually annual or semi-annual, on which the bond issuer will make interest payments.
coupon dates
is the date then bond will mature.
maturity date
is the amount which will be paid to the bondholder
maturity value
If the market value is greater than the par value, then the bond is selling at a
premium
If the market value is less than the par value, then the bond is selling at a
discount
is the risk caused by changes in market prices of equities or bonds.
price risk
is the risk due to a borrower’s failure to pay the principal and/or interest on due date.
credit risk
is the risk due to inability to sell or convert assts into cash on time, or in event where conversion into cash is possible but a losing end.
liquidity risk
is the risk due to political, economic, or social events or structures in the country.
country risk
