Stock Market
Two ways investors make money from stocks.
What is selling stocks for a higher price and dividends?
A bond, generally considered to be a risk-free investment, issued by the U.S. Treasury with a maturity of more than 10 years.
Unpaid interest that has been added to the principal balance of a loan
Capitalized Interest
A plan that outlines your monthly loan payment, repayment period, and how much interest you will pay over the life of the loan.
Over-relying on the first piece of information encountered
What is anchoring bias?
The stock market is booming.
What is the BULL?
Loans to issuers that return principal at maturity
What is an individual bond?
A process that allows a borrower to pause their federal student loan payments; interest does NOT accrue during this time period on subsidized loans
Deferment
Fixed, equal monthly payments designed to pay off the loan in 10 years.
Allowing one positive trait of a person to influence your overall opinion of their character.
What is halo effect?
The stock market is falling.
What is the BEAR?
Diversified, managed portfolios that lack maturity dates.
What is a bond fund?
A federal loan available to graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools
Direct plus loan
Lowers monthly payments by extending the term up to 25 years (requires >$30,000 in loans).
What is extended repayment plan?
A mental shortcut that allows us to make decisions quickly by estimating the probability of something happening based on the examples we can think of.
What is the availability heuristic?
Risks of being involved with buying one company's stocks.
What is losing money when the market goes down?
The risk that the company or government is unable to pay back the investor.
What is default risk?
Total expense of going to college which may include tuition, room and board, fees, books and supplies, transportation, health insurance, etc. Also known as Sticker Price or a school's published price.
Cost of Attendance
Monthly payments are a percentage of a family's income, with potential for forgiveness after 20–25 years.
What is income-driven repayment plans?
A cognitive bias where the psychological pain of losing is about twice as intense as the pleasure of gaining.
What is loss aversion?
A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company.
What is a stock?
The practice of investing in a large variety of stocks, bonds, and/or funds as a way to reduce your overall risk.
What is diversification?
A federal student loan available to undergraduate and graduate students; the student is responsible for paying the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into the principal amount of their loan
Payments start lower and increase every two years.
What are graduated repayment plans?
The observed tendency of humans to quickly return to a relatively stable baseline level of happiness despite major positive or negative life changes.
What is hedonic adaptation?