[Principles of Business, Finance, and Marketing] Chapter 18 Vocabulary

Flashcard maker : Lily Taylor
bank
an institution that accepts demand deposits and makes commercial loans
demand deposit
money put into a financial institution by depositors and which can be withdrawn at any time without penalty
commercial loan
a loan made to a business
consumer loan
a loan made to a individual
non-bank financial institution (non-bank)
an institution that offers only demand deposits or commercial loans, but not both
commercial bank
a financial institution that provides many services, such as handling time and demand deposits and commercial and consumer loans
check
a written order on a financial institution to pay previously deposited money to a third party on demand
endorsement
the signature usually on the back – that transfers a negotiable instrument
collateral
property a borrower pledges to assure repayment of a loan
unsecured loan
a loan that is not backed by collateral
secured loan (collateral loan)
a loan that requires the borrower to pledge something of value as security
prime rate
the lowest rate of interest; the rate at which large banks loan large sums to the best-qualified borrowers
electronic funds transfer (EFT)
transferring money by computer rather than by check
direct deposit
allows a business to electronically transfer employees’ paychecks directly from the employer’s bank account to employee’s bank accounts
automated teller machine (ATM)
a computer that enables bank customers to deposit, withdraw, or transfer funds by using a bank-provided plastic card
savings account
an account that allows customers to make deposits, earn interest, and make withdrawals at any time without financial penalties
certificate of deposit (CD)
a savings account that requires an investor to deposit a specified sum for a fixed period at a fixed interest rate
money market account
a type of savings account in which the deposits are invested in short-term, government-backed securities
investment company
an organism that specializes in the sale of a variety of stocks, bonds, and other securities
mutual fund
pools the money of many small investors for the purchase of stocks and bonds
treasury bill (t-bill)
short-term security sold by the federal government to finance the cost of running the government
treasury note
securities sold by the U.S. government in amounts of $1,000 up to $5,000 that generally matures in one to ten years
treasury bond
securities sold in $1,000 to $1 million amounts with the maturities ranging from 10 to 30 years
liquidity
refers to the ease turning an investment into cash without significant los
stock broker (broker)
a professional who buys and sells corporate securities for customers through a stock brokering firm that gives investment advice
stock index
a kind of average of the prices of selected stocks considered to be representative of a certain class of stocks or of the economy in general

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