Personal Finance Economics 2 – Flashcards
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Inflation
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A rise in the general level of prices.
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Insurance
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A form of risk management purchased by a business or individual against a possible financial loss paid in the form of a monthly or annual premium.
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Interest
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This is a total charge that is applied to a person when they borrow money.
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Interest Rate
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The percentage of a financial loan which is paid as a fee over a period of time.
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Investment
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Although it has many definitions, this is generally the act of providing funds to a financial organization for the purposes of making that organization more profitable, while earning a personal profit at the same time.
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IRA
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This is special savings account created for an individual to spend when the person stops employment completely. It often has many tax advantages over a regular savings account.
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Lender
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The institution or individual that loans money to an individual or business at a set interest rate over a set period of time.
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Liability
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To be at fault, either financially or legally.
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Life Insurance
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A special type of insurance paid to family or primary beneficiary at the time of death of the policy holder.
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Loss
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The dollar amount of an insured's financial injury by death or damage that the insurer is financially responsible.
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Money Market
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A type of checking account that also earns interest. These accounts generally have a higher minimum balance.
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Mutual Fund
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A collection of investments, usually stocks, bonds, and other securities managed by a portfolio manager. The collective investment gains or loses value as a group. Generally the group of items spread the risk of items purchased individually. The net proceeds are passed to the individual investors.
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Personal Debt
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This term typically refers to money that a person owes to someone or to a financial institution.
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Preferred Stock
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certificate of ownership in a corporation which does not entitle the holder to vote, but does give claim to the assets of the company before the common shareholder
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Premium
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The amount to be charged for a certain amount of insurance coverage.
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Prime Rate
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the lowest interest rate which banks charge their most reliable customers
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Professional
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A worker with a high level of specialized training or education that is almost always formalized.
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Progressive Tax
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a tax where the percentage paid in tax increases as the level of income rises
