A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit
A individual’s or company's legal debts or obligations that arise during the course of business operations.
What would happen if no one save?
People would not be able to invest. Only projects that could be financed out of current income would be possible.
risk reutrn relationship
a situation in which the outcome is not certain, but probabilities for each possible outcome can be estimated.
tax deferred investment and savings plan that acts as a personal pension fund for employees.
- (Individual Retirement Accounts) long term, tax sheltered time
- deposits intended for retirement. (Roth IRAs as well).
What three things do you need to figure out your morgage?
- How much you borrowed
- The interest rate
- Time of mortgage (most are 30 years)
What is and List Non- Bank Financial Intermediaries
- Non depository institutions that channel savings to borrowers.
- Finance Company
- Life Insurance Companies
- Realestate Companies
Real Estate Investment Trusts borrow money from banks an lend it to construction companies that build homes.
Name the three parts of a bond
- COUPON- stated interest on the debt
- MATURITY- Life of the bond
- PAR VALUE- The principle or total amount initially borrowed that must be repaid later to he lender at maturity.
What is Yeild
the annual interest divided by the purchase price
What is the difference between traditional IRA and Roth IRA
- traditional IRA- pay taxes when money is taken out
- Roth IRA- pay taxes when money is put in
a high risk bond
- Investors have a way to check the quality of bonds. The bond ratings use letters scaled from:
- AAA: the highest investment grade
- D: stands for default the lowest grade
Treasury notes and bonds
large long term obligations issued by the federal government and are seen as the safest of all financial assets.
Issued by corporations and are usually used for long term investment because they can be sold or liquidated quickly
bonds issued by state and local governments and are regarded as a safe, tax exempt investment.
Governmetn Savings Bonds
low denomination, nontransferable bonds issued by the U.S government, usually through payroll savings plans.
stocks that represent ownership shares in corporations.