DECA - PFL

Equal Credit Opportunity Act (1974)

Prohibits discrimination in credit transactions on many grounds including sex, age, race, origin.

Overdraft Protection

An option provided by banks to allow you to write checks and withdraw money even if you balance will go below zero.

Credit Reporting Agency

A company that keeps files and records on people who apply for and use credit.

Credit Union

A union that provides lower account fees and lower interest rates than banks.

Federal Trade Commission Improvement Act (1980)

Authorizes the Federal Reserve to identify unfair or deceptive acts and issue regulations to prohibit them.

Truth in Lending Act (1968)

Requires uniform methods for computing the cost of credit and disclosing credit terms. Borrowers have right to cancel loans within three days.

Consumer Leasing Act (1976)

Requires that institutions disclose the cost and terms of consumer leases such as automobile leases.

Cash Inflow

Money received by an organization as a result of it's operating activities, investment activities, and financing activities. ex: selling a car, making $5,000

Cash Outflow

Movement of money out of the business. Can include paying suppliers, buying equipment, paying wages and salaries, paying loans.

Debt Consolidation Plan

Combines all current debts from various creditors into a single, reduced interest payment plan.

Secured Loan

Guaranteed by collateral

Unsecured Loans

Do not require collateral and are made based on your credit score and the ability to repay the loan.

Installment loans

Made for a fixed amount of time of your application and approval. This loan is repaid in fixed monthly payments over a specific period of time. Interest is included in the payments.

Principal

The amount borrowed, or what is unpaid from the loan.

Non Revolving Credit

AKA Installment Plans. Requires a fixed monthly payment until the principal is paid off. Ex: Mortgage, Student Loans

Revolving Credit

Access credit whenever needed, pay creditor at least a minimum on the outstanding balance each month. Ex: Credit Cards

Wage Garnishment

Order from the court or a government agency for your employer to withhold a certain amount of money from your paycheck to send money directly to the creditor.

Credit Card Act (2009)

Provides important Consumer Credit protections. Credit Card company cannot generally raise the rate on existing balance, they must tell you 45 day before increasing the rate.

The Fair Credit Billing Act (1974)

Requires that the credit company prominently credits your payments and corrects mistakes on your bill without damage on your credit score.

CD's

Low Risk, Low return investments suitable for cash you don't need for extended periods of time. If you leave the money for the duration or term of the investment, the bank will pay you an interest rate slightly higher than earnings from a checking account.

Annuities

Paying an insurance company a lump sum in exchange for a guaranteed monthly payment for life.

Securities Exchange Commission (SEC)

Insures that both investors and traders have adequate information to make decisions and to prevent fraud and abuse

Financial Industry Regulatory Authority (FINRA)

Represents and regulates all stock and bond brokerage firms and their employees.

Accrual

A type of accounting system that reports income when earned and expenses when incurred.

Acquisition

One company decides to buy most or all of another company's ownership in order to take control of that company.

Capital Market

Locale of buying, trading, and selling mid-term and long term capital and loans where financial institutions act as intermediaries.

Collateral

Property that is offered to secure a loan or other credit and that becomes subject to seizure on default.

Compliance

The act of accepting and meeting specific standards.

Consolidation

The combining of two separate companies into one.

Data Mining

Sifting through large amounts of data to find the necessary information.

Dividend Reinvestment Plan (DRIP)

The option given to stockholders of a corporation to reinvest dividends received by purchasing whole or fractions of shares on the date of payment. Commissions may not be required to be paid when reinvesting in this way.

Dividends

Money distributed from Retained Earnings to the owners of a business as profits.

Economies of Scale

The decrease of cost per unit that is a direct result from and increase in production. This can be accomplished because as production increases, the cost of producing each additional item falls. Businesses often buy in volume to take advantage of the discounted rates due to economies of scale.

Financial Analyst

An expert professional in finance that recommends individuals buy, sell, or hold securities or investments.

Financial Institution

An establishment that provides financial services to clients. Banks, insurance brokers and investment firms are several examples.

Hostile Takeover

Acquisition of a company by purchasing a controlling interest directly from stockholders or attempting to replace the current management.

Interest Rate Risk

The risk involved in investing because of the uncertainty of fluctuation in interest rates.

Internal Rate of Return (IRR)

Used in capital budgeting. The amount of growth, or return, expected of a capital budgeting project or investment.

Merger

When two companies both decide to combine and do business as one entity.

Money Market

Trade in short-term and low-risk securities resulting in dividend earnings.

National Debt

The total amount of money a country's government has borrowed, by various means.

Net Present Value (NPV)

The difference between the current value of cash received and the current value of cash paid at a given interest rate for a given time period.

Payback Period

The time needed to earn back your initial investment.

Risk Control

Taking precautionary measures to prevent and minimize risk. Purchasing insurance is just one example.

Risk Management

Identifying, analyzing, and acting upon risks and uncertainties in decision-making.

Accelerated Depreciation

A system used for computing the depreciation of some assets in a way that assumes that they depreciate faster in the early years of their acquisition.

Accounting Cycle

A series of steps in recording a financial transaction from the time of occurrence to its reflection in the financial statements.

Accounts Payable

Money which you owe to an individual or business for goods or services that have been received but not yet paid for.

Franchise

a contractual agreement between a
parent company and a franchisee to distribute goods and services

Corporation

a form of business ownership that is owned by stockholders who
have purchased units or shares of the company

Elastic Demand

demand that changes according to changes in price

Inelastic Demand

demand that is not affected by changes in price.

Unitary Demand

when sales remain the
same because changes in supply and demand are equal

Tort

a private wrongdoing that potentially harms another person or entity

Doctrine of Sovereign Immunity

the universally accepted principle that each nation has the right to manage its own government and develop
its own laws.

Job Enlargement

combining different tasks into one position

Job Rotation

moving from one job to another job within an organization

Specialization by Trade

the type of work that a person performs in order to earn a living, such as engineering, public-relations, or accounting.

Frictional Unemployment

occurs because there are always workers who are in transition

Structural Unemployment

when the demand for certain types of workers declines and is often due to technology advancements and the need for new skills

Cyclical Employment

result of changes in the economic and business cycles

Wage Garnishments

court-ordered initiatives that involve taking income taken from an employee's salary and submitting it to another person or organization

Embezzlement

theft of valuables that have been entrusted to another's care

Securities Fraud

the use of misleading sales tactics to persuade investors to purchase securities

Espionage

revealing confidential information without the source or owner's permission and is often associated with spying

Variety-seeking Buying Behavior

involves the purchase of routine items

Brand-insistence Buying Behavior

buyer will not buy anything other than a specific
brand or product

Automation

involves the use of machines to carry out production tasks

Ergonomics

the study of the use of equipment or technology and
its effects on workers' physical well-being

Innovation

taking action to make the idea, item, or process available for consumers to use

Business-format Franchise

involves a close,continuous, working relationship between the franchisor and the franchisee

Customer Complaints

related to the business's policies and procedures

Consumer Products

economic goods and services that are purchased and used by the ultimate consumer

Capital Products

purchased by businesses for use in their operations

Communist Command Economy

capital for business investment is provided
by the government, which obtains it by taking the profits of businesses it owns and by levying taxes

Traditional Economy

people produce only what they must have in order to exist

Market Economy (Free Enterprise)

means of production and distribution are owned and controlled by individuals and businesses

Operating Expenses

costs of running the business

Gross Domestic Product

final market value of the total output of all goods and
services produced within a country's geographic boundaries during a year's time

Federal Reserve Banks

used by local banks to protect their banking functions; do not provide protection for local property

Tact

the ability to express your ideas and opinions so that they do not hurt or offend others

Cultural Imperialism

cultural aspects referring to the creation and maintenance of unequal relationships between civilizations favoring the more powerful civilization.

Nationalization

something whose ownership is taken over by the government

Credit

the arrangement in which businesses and individuals can purchase now and pay later.

Defamation

a tort that involves harm to an individual's or business's reputation

Monetary Gift

given without expectations of repayment

Punitive Damages

damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit

Contraction

businesses are affected by external factors; businesses often experience lower sales and profits

Business Cycle

the periods of expansion and contraction in economic conditions

Expansion

when the economy is strong and growing; businesses tend to make profits, expand operations, and
hire more employees

Transitional Economic System

when a country's economic system is moving from one type of economic system to another type of economic system

Secondary Dimensions of Diversity

differences that may change at various points throughout one's lifetime

Primary Dimensions of Diversity

inborn differences that cannot be changed and affect a person's entire life

Debit Card

funds are electronically transferred from the cardholder's checking or savings account to the seller's account

Corporate Bonds

bonds issued by corporations to fund operating expenses

Brokerage Bills

a fee charged by an agent, or agent's company to facilitate transactions between buyers and sellers

Gross Pay

total income earned for the pay period before income taxes and other deductions are subtracted from the wages

Net Pay

the amount of money that the worker receives after
the taxes and other deductions have been subtracted from his/her wages

Overtime Income

the amount of money that an hourly worker earns for working more hours than s/he is normally
scheduled to work

General Endorsement

allows the endorser to cash the check or deposit it into the account of his/her choice