second test Flashcards
dow jones
price-weighted average of 30 most significant stocks on NYSE and NASDAQ
NASDAQ
most trusted index for companies to list their shares on
stock
ownership of a corporation, usually as shares
bond
a debt security issues by corporations or governments
index fund
safest mutual funds for retirement investing
net worth
assets minus liabilities
dividend
$ paid regularly by a company to shareholders
Diversification
risk management, mixing a wide variety of investments within a profolio
Asset allocation
investment strategy, aiming to balance risk and reward betw. equities, fixed income, and cash
dollar cost average
investing same $ amt in same investment over a period of time; more shares when low, less when high
401k
employer-sponsored retirement plan; employees may match portions of pre or post-tax contributions
403b
retirement plan for government or tax-except organization employees to invest pre-tax
traditional IRA
allows pre-tax income contributions ti grow tax-deferred; no tax paid until later withdrawls
roth IRA
allows post-tax income contributions to be withdrawn tax-free after age 59 1/2
sep IRA
allows self-employed individuals to set up IRA’s for themselves and limited amount of employees
IRS
bureau of debt of treasury that enforces income tax laws “internal revenue service”
W-2
form reporting employee annual wages and tax withheld
withholding
amount of wages that an employer sends directly to the federal government and possibly state
net income
pay remaining after deduction and taxes paid
gross income
pay before any deductions or taxes are paid
amortization
figuring cost of loan repayment over time
repossession
when once collateral property is taken back by a financial institution
lien
guarantees repayment of a loan or seizure of assets
unemployment rate
equals number of unemployed divided by number in labor force multiplied by 100
quotas
limits on quantity of imports
fannie mae
purchases mortgages from banks, bundles them and sells them off on the market discounted
cosigner
an additional repayment source for the primary borrower to be approved for a loan
equity
amount of ownership of an asset
maturity
the date by which the final payment is to be made; could refer to loan or investment
PDMU
the satisfaction of a good or service declines as it’s available supply increases “principle of diminishing marginal utility”
