Economics Final Exam Study Guide Answers – Flashcards
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S&P (Standards and Poors)
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stock index made up of 500 stocks
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SEC (Securities Exchange Commission)
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This investigates the market to prevent unlawful actions
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DRIP (Dividend Reinvestment Plan)
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) If you are enrolled in this, it means that you will get additional stock instead of dividends (money). It would increase your total shares of stock
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LIQUIDITY:
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This refers to the ease at which you can turn your investments into cash, the length of time before an investment reaches maturity.
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YIELD:
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The amount of money that you receive on your investments
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COMMON STOCK:
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would allow you to vote at the corporate yearly meeting
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CAPITAL LOSS:
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refers to the money that is lost if an investor sells his stock for a loss
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MATURITY
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When you cash in your investments
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CORPORATE STOCK:
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means that you are part owner of that company
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CD (Certificate of Deposit)
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A time deposit that varies in its' length to time
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IRA:
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A time deposit that cannot be touched until the age of 59 ½ years old.
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UAW:
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One of the nation's largest unions
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BOYCOTT:
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This is when a group encourages people to NOT do business with a company, an attempt to get the public NOT to buy products from a company
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BLACKLIST:
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This would inhibit you from getting a job anywhere after you were fired
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STRIKE:
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When workers refuse to go back to work
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SCAB:
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When someone crosses the picket line to replace a striking worker
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INJUNCTION:
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A court order, an order by a judge forcing people to go back to work
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LOCKOUT:
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When the owner of a company prevents the workers from going back to work in order to force negations on his/her terms
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COLLECTIVE BARGAINING:
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negotiations between labor and management
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ARBITRATION:
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When a 3rd party is brought in to help with the collective bargaining and both sides agree to abide with their decision no matter which side they choose.
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MEDIATION:
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When a 3rd party is brought in to help with the collective bargaining, their decisions is only a suggestion and not a binding decision
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FDA:
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Federal Drug Administration, which insures that cosmetics are safe to use
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FTC:
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Federal Trade Commission, Investigates mergers and fraud in advertising
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FCC:
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Federal Communication Commission, Monitors language on TV, radio, and movies
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OSHA:
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Government agency that monitors safety in the workplace
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FDIC:
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This insures your banking account up to $250,000, created during the great depression to help give people confidence in the banking system
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EFT:
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Electronic Funds transfer, describes any money moving via computer
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FSLIC:
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Federal Savings & Loan, It was designed to insure the savings & loans during the1980's
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ACH:
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Automatic Clearing House, this is when bills are automatically paid each month out of your paycheck.
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FIAT:
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The US money is this type of money, money that has no true value (You can't go cash it in for gold)
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COLLATERAL:
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Required to obtain a secured loan
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BLACK TUESDAY:
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10/29/29 when the stock market crashed
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BLACK MONDAY:
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10/19/87 the biggest one day drop
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BLACK FRIDAY:
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the day that most businesses finally show a profit for the year (the day after Thanksgiving)
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CYBER MONDAY:
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The busiest day for Internet shopping
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DEPRESSION:
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long-term downturn in economic activity in one or more economies. A depression is worse than a recession
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EQUITY:
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if you take out a second mortgage, this will go down & cause you to take longer to pay off the house When you sell your house you almost always get your equity back
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DEPRESSION:
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A depression is worst than a recession
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BEAR MARKET:
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is a market on the fall
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BULL MARKET:
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is a market on the rise
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PRIME RATE:
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the interest rate that a bank gives to its BEST customers
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DISCOUNT RATE:
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the interest rate that the fed charges banks to burrow money
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RESERVE REQUIREMENT:
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The amount of money that a bank must have at all times.
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EASY MONEY:
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Making it easier to borrow money, the fed will use easy money if we are in a recession, EX. lowering the reserve requirement, lower interest rates
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TIGHT MONEY:
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Making it harder to borrow money, Ex. Raising the discount rate
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MEMPHIS:
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is in district 8
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DISTRICT 8:
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Headquarters is in St. Louis
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CORPORATIONS:
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This is a company that has gone public and is selling stocks and bonds to the general public to raise money for the company, They can sue other corporations, and investors personal assets are not in play (they can't be touched), a disadvantage is that stockholders have very little say in how a company is run, they also control the most money in the US.
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PARTNERSHIPS:
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Company owned by more than one more, Shared liability is a disadvantage
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GENERAL:
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This partner has the main control of the business
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LIMITED:
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This type of partner does not have any liability except for the money they initially invested
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SOLE PROPRIETORSHIPS
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This is a company owned by one person, the most common form of business in the US, one perk would be that you get to set your own hours
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PERFECT COMPETITION
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A market that has many buyers and sellers
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OLIGOPOLY:
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A market structure that is dominated by a small number of sellers, EX. airline industry
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MONOPOLY:
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A market structure that has only one seller, and no competition
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TECHNOLOGICAL MONOPOLY:
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is created when you create a product and get a patent on it
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SUBSIDIES:
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government payments that help to offset the cost of production
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PRICE CEILING:
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The highest amount of money that a business can charge you for a product or service.
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OPEC
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Organization of Petroleum Exporting Countries 5 original members of OPEC: Saudi Arabia, Iran, Iraq, Kuwait, Venezuela
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CARTELS:
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A group of businesses that join together to dominate a market, they are illegal in the US, EX. OPEC
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CONGLOMERATE
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A type of business merger between companies that have nothing (very little) in common
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HORIZONTAL MERGER:
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A type of merger between companies that compete with each other
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VERTICAL MERGER
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A merger between companies that do not compete, but instead sale to each other
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COLLISION:
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Type of insurance that pays for damages to your car
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LIABILITY
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Type of insurance that pays for the other driver's damage, the only type of car insurance required in the state of Tennessee.
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DEDUCTIBLE:
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The money that your insurance company requires that you pay first before they pay (the amount of money that you must pay before your insurance pays)
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SHORTAGE:
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When Supply is smaller < than demand
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SURPLUS:
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When Supply is greater > than demand
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DEMAND CURVE:
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Demand Increases then the curve will move to the right Demand Decreases then the curve will move to the left
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COMPLEMENTARY GOODS
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(Go with each other) Example: Burger King French fries are complementary to the Whopper.
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INELASTIC:
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If a product has an inelastic price, then no matter what happens to supply and demand, the price will stay the same at all times. (Price Not Change) Example: Insulin
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ELASTIC:
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The price will change depending on the supply and demand
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TENANT:
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The two most important things that a tenant must do is to pay the rent and to keep up the property
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SECURITY DEPOSIT
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is designed to guarantee that the tenant does not damage the apartment
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PROGRESSIVE TAX
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As you make more money, you pay a higher percentage of that money in taxes. It is based on ability to pay. As you make more money you will move up different tax brackets. You make more money, you will pay more in taxes. EXAMPLE: FEDERAL INCOME TAX 10% to 38%. If you win 1 million, you can take home 650 thousand, after taxes.
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REGRESSIVE
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A tax on required items. It hurts poor people more than rich people. It is based on percentage of income spent on a product. EXAMPLE: TAX ON FOOD Poor spend a larger percentage on food so they pay more tax.
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Proportional- AKA Flat Tax
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Everyone pays the exact same percentage. The percentage stays the same so if you make more money you still pay the same percent (some state income). EXAMPLE: Arkansas State Tax
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INCOME
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_____________ tax on how much money you make (Federal and State)
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EXCISE
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tax on a specific product (Tax on tobacco, Gas, and Alcohol) (Federal)
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ESTATE
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tax on property of dead people (Federal). When someone dies the government takes a percentage before the kids can inherit it.
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INHERITANCE
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only tax people that inherit property. (State) When your kids get the money they have to pay this state tax.
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GIFT TAX
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if you give someone more than $13,000, you have to pay a gift tax. (Federal) Except- if you give to a charity, you don't have to pay this. If you are paying for tuition for someone, you don't have to pay this tax.
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SALES
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tax when you buy products.
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PROPERTY
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tax on buildings and land (State and Local)
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TKR: Ticker
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The abbreviation for the company
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CLOSE
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The price of the stock at the close of business yesterday, selling price of when the stock market closed yesterday.
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YTD CHG
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Year to Date Change: The change of the stock price since January 1st.
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1 YR RTN
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One Year Return: What you would have gotten in your investment from one year ago to today.
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52 HIGH
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Within the last year (52 Weeks) the highest price the stock has sold for
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52 LOW
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Within the last year (52 Weeks) the lowest price the stock has sold for
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CAPITAL GAIN
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a profit from the sale of property or of an investment.
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CAPITAL LOSS
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the difference between the purchase price and the price at which the asset is sold, where the sale price is lower than the purchase price. (lose money)
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SEVERANCE PAY
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Pay you receive when you have been laid off through no fault of yours.
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EEOC
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The Equal Employment Opportunity Commission is a federal agency that administers and enforces civil rights laws against workplace discrimination.
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