Banks
What is a bank
This is a financial institution where people deposit and borrow money.
What is a budget?
A plan for how you will spend and save your money
Who is an entrepreneur?
The person who starts and runs a business.
What is risk?
The possibility of losing money in an investment.
What is risk tolerance?
The level of risk a person is comfortable taking when investing.
What is a savings account?
This type of bank account typically earns interest and is used to store money long term.
What is income?
Money you receive, especially from a job.
What is revenue?
The total amount of money a business makes from sales.
What is return?
The money earned from an investment.
What is low (or conservative) risk tolerance?
Someone who prefers safe investments with low returns has this type of risk tolerance.
What is interest
This is the money a bank charges you for borrowing money.
What are fixed expenses?
: Costs that stay the same each month, like rent.
What is an acquisition?
When one company buys another company.
What is diversification?
Spreading investments to reduce risk.
What is high (or aggressive) risk tolerance?
Younger investors often have this type of risk tolerance because they have more time to recover losses.
What is the FDIC?
This government agency insures deposits up to $250,000 in the U.S.
What is the 50/30/20 rule?
A budgeting rule that suggests 50% needs, 30% wants, 20% savings.
What is a corporation?
A business owned by shareholders.
What is higher risk?
Investments like stocks are generally considered this compared to savings accounts.
What is financial situation (or time horizon)?
This factor, such as age or income, affects a person’s risk tolerance.
What is the reserve ratio?
This ratio shows how much of a bank’s deposits are kept on hand instead of loaned out.
What is net income (or profit)?
The difference between income and expenses.
What is a business plan?
The document that outlines a company’s goals and strategy.
What is higher risk?
The relationship showing that higher potential returns usually come with this.
What is a risk assessment?
A questionnaire investors complete to determine suitable investments.