Money Matters Spring Final Review

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Variable Expense

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Economics

45 Terms

1

Variable Expense

Expenses that vary from month to month, such as groceries, entertainment, and dining out.

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2

Fixed Expense

Expenses that remain constant each month, like rent, mortgage payments, or insurance premiums.

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3

Long-Term Goal

 A desired achievement or outcome that typically requires substantial time and effort to accomplish, such as buying a house or saving for retirement.

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4

Gross Income

Total income earned before deductions such as taxes and retirement contributions are subtracted.

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5

Net Income

 Income remaining after deductions like taxes and other expenses have been subtracted from gross income.

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6

Principal on loan

The original amount of money borrowed or invested, separate from any interest or additional fees.

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7

Certificate of Deposit (CD)

A savings certificate with a fixed maturity date and a specified interest rate, issued by a bank or credit union.

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8

Needs VS Wants

Needs are necessities essential for survival, while wants are desires or preferences that are not necessary for basic living.

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9

5% down payment on a $17,000 car

$850 (5% of $17,000).

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10

15 Year Mortgage VS 30 Year Mortgage

 A 15-year mortgage typically has higher monthly payments but lower overall interest costs compared to a 30-year mortgage.

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11

FSBO: "For Sale By Owner

A method of selling property without the use of a real estate agent.

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12

Housing Percentage Recommendation

 A guideline suggesting the portion of income that should be allocated towards housing costs, usually around 25-30% of gross income.

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13

Term Life Insurance

 Life insurance that provides coverage for a specific term or period of time, typically offering lower premiums compared to whole life insurance.

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14

W4

A tax form completed by employees to indicate their withholding allowances for federal income taxes.

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15

Mutual Fund

An investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities.

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16

Stock

Ownership in a corporation, representing a claim on part of the company's assets and earnings.

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17

Premium (Insurance)

The amount paid for insurance coverage, typically on a monthly or annual basis.

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18

6 Characteristics of Money

Durability, portability, divisibility, uniformity, limited supply, and acceptability.

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19

What does a stock represent?

Ownership stake in a company, entitling the holder to a portion of the company's assets and profits.

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20

Preferred stock

 A class of stock that typically pays a fixed dividend and has priority over common stock in terms of dividends and asset distribution in case of liquidation.

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21

Dividends

 Payments made by a corporation to its shareholders, usually as a distribution of profits.

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22

IPO

Initial Public Offering - the first sale of a company's stock to the public.

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23

Mutual Fund advantages and disadvantages

Advantages include diversification, professional management, and liquidity; disadvantages may include fees, lack of control, and potential for underperformance.

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24

Diversification

Spreading investments across different assets to reduce risk.

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25

Diversifying between sectors?

Allocating investments across different industries or sectors to minimize the impact of downturns in any single sector.

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26

Speculative investment

 An investment with a high degree of risk, often involving the possibility of significant gains or losses.

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27

Bear Market

A market characterized by declining prices, pessimism, and a general lack of confidence among investors.

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28

Bull Market

A market characterized by rising prices, optimism, and investor confidence.

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29

Blue Chip

 A large, well-established, and financially stable company with a history of reliable performance.

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30

Bond

A fixed-income investment where an investor loans money to an entity (typically a corporation or government) for a defined period at a fixed interest rate.

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31

Capital

Financial assets or the value of assets available for use in producing further assets.

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32

Commodities

Raw materials or primary agricultural products that can be bought and sold, such as gold, oil, or wheat.

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33

Insider Trading

Trading of a public company's stock or other securities based on material, non-public information about the company.

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34

PE Ratio

 Price-to-Earnings Ratio - a measure of a company's current share price relative to its per-share earnings.

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35

Penny Stock

Low-priced, speculative stocks typically traded over-the-counter, often with small market capitalizations and high volatility.

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36

Portfolio

A collection of investments owned by an individual or institution.

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37

Share

A unit of ownership in a company, representing a proportional claim on its assets and earnings.

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38

Speculator

 An investor who takes on higher risk in the hope of making significant short-term gains.

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39

Trading Session

A period during which financial markets are open for trading.

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40

Volume

The number of shares or contracts traded in a security or market during a given period.

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41

Stockbroker

 A licensed professional who buys and sells securities on behalf of clients.

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42

Earnest Money

A deposit made by a buyer to demonstrate serious intent to purchase a property.

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43

Mortgage

A loan used to purchase real estate, with the property itself serving as collateral for the loan.

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44

Deed

A legal document that transfers ownership of real estate from one party to another.

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45

Bitcoin

A digital or cryptocurrency that operates on a decentralized network using blockchain technology.

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