amdm midterm notes

What is a High-Yield Savings Account (HYSA)?

The safest savings option that earns interest.

What is a CD (Certificate of Deposit)?

A savings option with a fixed time period that is safe unless you withdraw early, which incurs a penalty.

What are stocks?

Investments that represent ownership in a company.

What are bonds?

Investments where you lend money to earn interest in return.

What does diversifying mean in investing?

Spreading out investments to reduce risk by not putting all money in one place.

What is liquidity?

The speed at which an investment can be turned into cash.

What does Return on Investment (ROI) measure?

How much money you earn from an investment based on interest rates.

What is the formula for simple interest?

I = Prt, where P is the principal, r is the rate (as a decimal), and t is the time in years.

What is the compound interest formula?

A = P(1 + r)^t, which shows that interest earns interest.

What distinguishes a Roth 401k from a Traditional 401k?

A Roth 401k is taxed before money goes in and not taxed on withdrawal, while a Traditional 401k is not taxed when you add money but is taxed upon withdrawal.

What is the standard deduction for a single filer in 2026?

$15,750.

What can be deducted under itemized deductions?

Medical expenses above 7.5% of AGI, state & local taxes (up to $10,000), charitable donations (up to 100% of contributions), and mortgage interest on up to $750,000 of debt.

What is a convenience sample?

A sample that is easy to reach, often leading to bias.

What is a Simple Random Sample?

A sampling method where everyone has an equal chance of being chosen.

What is the confounding variable?

A hidden variable that affects the results of a study.

What is the placebo effect?

A positive reaction to a fake treatment.