Financial planning Unit 2 Flashcards

Primary capital

Sells new stock or bond issues to investors.

Liquidity

How easily an asset can be converted to cash

Checking

An account were you can withdraw money easily and frequently.

Lockbox

A service a bank provides to a company for the receipt of customers’ payments, which are directed to a special post office box.

Soft commodities

Financial market where people make investment in goods like cocoa beans and corn. These type of commodities are typically sold in high volume.

Continuous market

Allows traders to traders to trade at any time the market is open.

Line of credit

A service banks provides to a business that needs to borrow funds for a short period of time. It allows allows for flexibility by allowing businesses borrow different amounts of money at different times.

Financial market

A marketplace where trading of securities such as equities, bonds, currencies, and derivatives occurs

Certified financial planner

A professional who helps people make the best investment decisions.

Mortgage company

People usually require their services when they need to purchase real estate.

Call market

Transactions takes place at predetermined time intervals.

Asset management

The direction of a client’s cash and securities by a financial services company, usually an investment bank or an individual.

Efficiency

A level of performance that describes using the least amount of input to achieve the highest amount of input.

Check payment

Proofing, encoding, capturing, and sorting are all steps in this banking process

Eurocurrency

A form of money held or traded outside the country in whose currency its value is stated

Retail Bank

A safe place in which people can earn interest on their savings and withdraw funds without experiencing sizable financial penalties.

Overdraft

A protection that ensures a check, ATM, wire transfer, or debit card transaction will clear if the account balance falls below zero.

Automated Clearing House

The electronic clearance and settlement used for financial transactions by U.S commercial banks and other institutions.

Collectibles

Ownership of items worth far more than originally sold because of rarity and/or popularity.

Mutual funds

Type of investment that includes several people pooling their money to purchase stocks and bonds.