Stock Market
What is the stock market?
A place where people buy and sell shares of companies
What is investing?
Using money to try to earn more money over time
What is collateral?
Something valuable used to secure a loan
What is the difference between a credit card and a debit card?
Credit cards borrow money; debit cards use money already in a bank account
What is installment credit?
Borrowing money and repaying it in fixed payments over time
What does it mean when stock prices go up?
The company is gaining value or investors expect it to do well
What is interest?
Money earned or paid for borrowing money
What happens if someone does not repay a loan
Their credit can be damaged and property may be taken
What happens when you only pay the minimum balance on a credit card?
Interest builds and debt lasts longer
Which type of loan usually has monthly payments over many years?
Installment loan
What is a dividend?
Money paid to shareholders from company profits
Which is usually riskier: a savings account or stocks?
Stocks
Which type of loan is commonly used to buy a house?
A mortgage loan
What is a credit limit?
The maximum amount you can borrow on a credit card
Why should borrowers compare loan terms before signing an agreement?
To find lower interest rates, better payment terms, and avoid costly debt
Why is investing in only one company considered risky?
If the company fails, the investor can lose a lot of money
Why might some investors choose bonds instead of stocks?
Bonds are usually safer and provide more stable returns than stocks
What is the difference between secured and unsecured loans?
Secured loans require collateral; unsecured loans do not
Why is building good credit important?
It helps people qualify for loans, apartments, and lower interest rates
Why might a bank deny someone a loan application?
Low income, poor credit history, high debt, or lack of collateral
What is the difference between the NYSE and NASDAQ?
Both are stock exchanges, but NASDAQ is mainly electronic and includes many tech companies
What is one advantage of keeping an emergency fund in a savings account?
It provides quick access to money during unexpected situations like medical bills or job loss
Why might someone with a low credit score pay higher interest rates?
Lenders see them as a higher risk
What is one danger of using credit cards irresponsibly?
Debt, high interest, or damaged credit
How can taking out too many loans at once affect a person’s financial future?
It can increase debt, lower credit scores, and make repayment difficult