Set 1 Vocab Flashcards
Dodd-frank Wall Street reform and consumer protection act
A compendium of federal regulations, primarily affecting financial institutions in their consumers, that the Obama administration passed in 2010 in an attempt to prevent the reoccurrence of events that calls the 2008 financial crisis. The Dodd Frank Wall Street reform and consumer protection act commonly referred to as simply “Dodd Frank quote is supposed to lower risk in various parts of the US financial system. It is named after US representative Barney Frank and US senator Christopher j. Dodd. because of their involvement in the creation of passage of the acts
Preference share
Company stock dividends that are paid to shareholders, before common stock dividends are paid out. In the event of a company bankruptcy, preferred stock shareholders have a right to be paid company assets first. Preference shares typically pay a fixed dividend where as common stocks do not. Unlike common shareholders, preference shareholders usually don’t have voting rights. Also referred to as preferred stock.
Market value
The price and as it would fetch in the marketplace; commonly used to refer to the market capitalization of a publicly traded company, and it’s obtained by multiplying the number of outstanding shares by the current share price. Easiest to determine for exchange traded instruments (stocks and futures) since their market prices are widely disseminated and easily accruable, but is a little more challenging to ascertain for over-the-counter instruments like fixed income securities.
Asset class
A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. The three main asset classes are equities (stocks), fixed income (bonds), and cash equivalents (money market instruments).
Equity financing
The process of raising capital through the sale of shares in an enterprise. Equity financing is essentially refers to the sale of an ownership interest to raise funds for business purposes. Equity financing spans a wide range of activities in scale\Scope from a few thousand dollars, raised by an entrepreneur, to giant initial public offering’s running into the billions. Generally associated with financing large public companies, it also includes financing by private companies
Credit union
Member – own financial co-op. These institutions are we created and operated by its members and profits are shared amongst the owners. As soon as you deposit funds into a credit union account you become a partial owner and participate in the unions profitability.Credit unions are formed by large corporations and organizations for their employees and members.
Loan to value ratio
A lending risk assessment ration that financial institution and other lenders examined before approving a mortgage. Typically assessments with high LTV ratios are generally seen as high-risk, and therefore, if the mortgage is excepted the loan will generally costs the borrower more than he or she will need to purchase mortgage Insurance
Tangible net worth
A measure of the physical worth of the company. Doesn’t contain intangible assets. Calculated by taking a firm’s total assets and subtracting the value of all its liabilities and “tangible “assets.; The sum of all your tangible assets less only the liability you have
Marginal utility
The additional satisfaction of consumer games from consuming one more unit of a good or service. Used to determine how much of an item consumers will purchase.
Positive; consumption of an additional item increases the total utility
Negative; consumption of additional item increases the total utility
Individual retirement account
And investing tool used by individuals to earn in earmark funds for retirement savings. Therefore there are several types of IRAs. Traditional, Roths, SIMPLEs and SEPs. Traditional and Roth IRA’s are established by individual tax payers who were allowed to contribute 100% of compensation up to a dollar amount. SEPs and SIMPLEs are retirement plans are established by employers and individual participant contributions are made to these types of retirement accounts
Monopolistic market
A type of market that be just one, if not all, of the traits of a monopoly such as high-priced levels, supply constraints, or excessive barriers to entry. Because this type of market would be comprised of one supplying firm, without proper legislation or controls, this firm possesses the power to raise prices without adversely affecting the sale of its products/services. This type of market stands in contrast to a perfectly competitive market
401(k) plan
A savings account established by your employer that is specifically for retirement savings. The money you put into your 401(k) is not taxed until you use it. Some employers will “match” some of the money you put into the 401(k). This is equal to one dollar from you equals one dollar from your employer
Elasticity of supply
A measure of the responsiveness of the quantity supplied to price changes calculated by dividing the percent change in the quantity supplied by the percent change in the price
Elasticity of demand
A measure of how strongly consumers respond to a change in the price of a good, calculated as a percentage change in quantity demanded divided by the percentage change in price.
Income effect
The change of an individual’s or a calm as income and how that change will impact the quantity demanded of a good or service. The relationship between income and the quantity demanded is a positive one, as income increases, so does the quantity of goods and services demanded
