Money
The general increase in the cost of goods over time.
Inflation
What type of investment is a debt security? (ie. a company or government owes you money)
Bond
Give an example of Revolving Credit
Credit Card
Give 3 Characteristics of an HMO
- all doctors in one building
- primary care referral needed
- lower costs overall
- no coverage out of network
Give 3 Characteristics of a Bank
- for profit
- FDIC Insured
- anyone can join
- more products/services (ex. investing)
- higher interest on loans, lower on savings
Explain the Rule of 72
72/interest rate = time for money to double
(assuming compound interest and no additional deposits are made)
Which type of stock is paid dividends first, and is considered less volatile?
Preferred Stock
Follow up: which type of stock gives the stockholder voting rights?
Give 2 examples of installment credit
Mortgage, Car Loan
Give 3 characteristics of a PPO
- flexible (out of network some coverage)
- no referral needed for specialist
- higher costs
Give 3 Characteristics of Credit Unions
- qualifying characteristic to join
- owned by members
- non-profit
- higher interest on savings, lower on loans
- less products/services
- NCUA Insured
What is a Variable Expense? Give 3 examples
Changes each month (entertainment, groceries, gas, utilities)
A higher risk of investment usually means a chance for higher...
Reward/Return
What two laws require companies to disclose the true cost of credit?
Truth in Lending Act
2009 Credit CARD Act
Give an example of something covered by collision, liability, AND comprehensive car insurance
Collision (damage to my car)
liability (damage to another car I hit)
comprehensive (damage to my car not from another car)
How much money does the FDIC/NCUA Insure at financial institutions?
$250,000 per person per account type
Explain the time Value of money.
Money today is worth more than money tomorrow, because:
1. you can never make up for missed opportunities for profit
2. inflation
Explain what Diversification and give two medium risk investments that are already diversified at the time of purchase.
Spreading out risk with multiple investments "Don't put all your eggs in one basket"
Mutual Funds and Index Funds
A co-signor is responsible for what if the individual taking out a loan defaults?
The entire remaining balance of the loan.
Term (specific time) Whole (entire life - cash value that can be borrowed against)
Put the following in order of liquidity (most to least): Savings, Checking, CD, MMA
Checking, Savings, MMA, CD
What does do the words Roth and Traditional mean in terms of retirement savings?
Roth - pay taxes now, not in retirement
Traditional - tax advantage now, pay taxes in retirement
What two agencies watch the market to ensure fair and transparent trading?
FINRA & SEC
What are the 5 C's of credit. Explain 2
Capacity, Collateral, Character, Capital, Conditions
What type of car insurance is required by Virginia Law?
Liability
What is the difference between APR and APY
APR - Annual Percentage Rate (cost of interest on a loan; YOU pay)
APY - Annual Percentage Yield (return on an investment; paid to you)