wealth management key terms – Flashcards
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consequence
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having important effects or influence
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oppurtunity cost
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the best alternative forgone due to a decision being made
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trade-off
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an exchange that occurs as a compromise
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decision making
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the cognitive process of reaching a decision
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resources
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available means
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scarcity
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limited quantities of resources to meet unlimited wants
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distribution
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the commercial activity of transporting and selling goods from a producer to a consumer
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wealth management
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combination of financial/investment advice, accounting/tax services, and legal/estate planning
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allocation
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a share set aside for a specific purpose
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property rights
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the ability of an individual to own and exercise control over scarce resources
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financial institution
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an institution (public or private) that collects funds (from the public or other institutions) and invests them in financial assets
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nonprofit organization
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Institution that functions much like a business, but does not operate for the purpose of generating profits
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cash
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prompt payment for goods or services in currency or by check
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credit
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arrangement for deferred payment for goods and services
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debit
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an accounting entry acknowledging sums that are owing
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EFT
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Electronic Funds Transfer
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incentives
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advantages that help businesses, such as lower taxes, cheaper land, and employee training programs.
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values
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principles considered desirable
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risk
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a venture undertaken without regard to possible loss or injury
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return
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pay back
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profit
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the excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses)
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interest
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a fixed charge for borrowing money
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self-interest
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concern for ones own well being and advantages
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saving
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the activity of protecting something from loss or danger
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investing
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The act of committing money or capital to an endeavor (a business, project, real estate, etc.) with the expectation of obtaining an additional income or profit.
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financial needs
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financial goals
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specific objectives to be accomplished through financial planning
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good faith
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having honest intentions
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disclosure
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something that is made open or revealed
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float
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the number of shares outstanding and available for trading by the public
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time value of money
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increase of an amount of money as a result of interest or dividends earned
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inflation
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a general and progressive increase in prices
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interest rate
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the percentage of a sum of money charged for its use
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present value
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the amount of money you would need to deposit now in order to attain a desired amount in the future
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compound interest
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interest calculated on both the principal and the accrued interest
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wage
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money paid to a worker
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salary
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something that remunerates
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rent
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a regular payment by a tenant to a landlord for use of some property
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dividends
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profits paid to investors
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transfer payment
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a public expenditure (as for unemployment compensation or veteran's benefits) that is not for goods and services
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on-boarding
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Programs aimed at helping employees integrate, assimilate, and transition to new jobs
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W-4
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The withholding form each new employee fills out, stating the number of exemptions. the more exemptions listed, the less withholding tax will be taken from the paycheck.
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personal allowances
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The money(usually a set amount) given to an individual to spend
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exemption
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an act exempting someone
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I-9
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pay period
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The period covered by a salary payment
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gross income
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Income before taxes
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net income
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the excess of revenues over outlays in a given period of time (including depreciation and other non-cash expenses)
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deduction
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an amount or percentage deducted
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pension
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a regular payment to a person that iis intended to allow them to subsist without working
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401(k)
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A defined contribution plan that automatically takes out money from an employee's paycheck before income taxes and invests it in mutual funds for purposes of retirement savings
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FICA
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Short for Federal Insurance Contributions Act, the name given on the paycheck stub for Social Security and Medicare taxes. The employee pays some of the FICA tax, and and the employer pays some of this tax for each employee. Social Security pays benifits for older people, people with disabilaties, and minor children and surviving spouses of deceased workers. Medicare pays for hospital insurance for those over 65.
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asset
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a useful or valuable quality
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liability
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the state of being legally obliged and responsible
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net worth
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total assets minus total liabilities
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personal budget
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a specific plan for spending your income
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income
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the financial gain (earned or unearned) accruing over a given period of time
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expenses
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the costs of operating a business
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maintain
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keep in safety and protect from harm, decay, loss, or destruction
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checkbook register
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a record of checks written and deposits made in a checking account, kept by the depositor
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savings register
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Place to create a savings account.
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deposit
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a payment given as a guarantee that an obligation will be met
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withdrawal
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the act of taking out money or other capital
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reconcile
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bring into consonance or accord
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bank statement
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a periodic statement prepared by a bank for each client
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transaction
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a business activity that changes assets, liabilities, or owner's equity
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transaction fee
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an extra charge for various credit activities such as using an ATM or receiving a cash advance
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balance
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compute credits and debits of an account
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overdraft protection
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an automatic loan made to you if you write a check for more money than you have in your account
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credit
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an accounting entry acknowledging income or capital items
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APR
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this stands for annual percentage rate, which is a number calculated by taking into account the total cost of the loan, including what the borrower will pay in interest; this makes it easier to compare different loan offers
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annual fee
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An amount that credit card companies can charge for the use of a credit card.
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late fee
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a penalty for making a payment after the due date
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loan
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the temporary provision of money (usually at interest)
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installment loan
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a loan repaid with interest in equal periodic payments
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line of credit
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the maximum credit that a customer is allowed
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secured loan
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a loan backed by something valuable, such as property
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unsecured loan
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A loan made on the signature and credit of the borrower, not secured by collateral. Credit card. (Debenture)
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fixed-rate loan
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adjustable-rate loan
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interest-only loan
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mortgage
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a conditional conveyance of property as security for the repayment of a loan
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lien
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the right to take another's property if an obligation is not discharged
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direct car loan
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Loan where the lender goes through the borrower
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indirect car loan
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Loan deal in which the actual lender may not be known to the borrower.
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payday loan
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A loan where a borrower gets a cash advanced based on his paycheck. These loans generally must be repaid on the next payday.
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usury
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the act of lending money at an exorbitant rate of interest
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predatory lending
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Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.
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loan shark
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someone who lends money at excessive rates of interest
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billing statement
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your periodic credit card bill, which describes and summarizes all the outstanding balances, purchases, payments, credits, finance charges and other transactions for the month
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tax liability
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the amount of tax owed
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adjusted gross income
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your gross income after certain reductions have been made.
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1040 EZ tax form
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Simplified IRS tax form which some individuals can file instead of the 1040 form.
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1040 tax form
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The standard IRS form for individual tax returns.
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taxable income
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income on which tax must be paid; total income minus exemptions and deductions
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exemptions
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immunity from a general burden, tax or charge; in bankruptcy or judgment executions, that portion of the debtor's property that cannot be liquidiated and applied to her debts
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deductions
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variable amounts that you can subtract, or deduct, from your gross income
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indentity theft
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When someone uses your name, Social Security number, credit card number, and other personal information without your permission
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phishing
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a technique to gain personal information for the purpose of identity theft, usually by means of fraudulent e-mail
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insolvent
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unable to meet or discharge financial obligations
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total debt
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the sum of all bonds issued by the municipality and subtracts self-supporting debt from the figure
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total assets
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The sum of current, fixed and intangible assets, which represents everything of value that is owned by the company
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bankruptcy
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inability to discharge all your debts as they come due
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debt consolidation
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act of combinging all debts into one monthly payment, typically extending the terms and the length of time required to repay the debt
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secured debt
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Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans and tax liens.
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unsecured debt
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A debt not backed by specific property to satisfy the indebtedness in case of default.
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forbearance
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a delay in enforcing rights or claims or privileges
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foreclosure
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the legal proceedings initiated by a creditor to repossess the collateral for loan that is in default
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insurance
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protection against future loss
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premium
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payment or reward (especially from a government) for acts such as catching criminals or killing predatory animals or enlisting in the military
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deductible
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a clause in an insurance policy that relieves the insurer of responsibility to pay the initial loss up to a stated amount
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coverage
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the protection provided by the terms of an insurance policy
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liability
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the state of being legally obliged and responsible
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estate planning
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preparing a plan for transferring property during one's lifetime and at one's death
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beneficiary
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the recipient of funds or other benefits
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living trust
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a trust created and operating during the grantor's lifetime
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probate
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a judicial certificate saying that a will is genuine and conferring on the executors the power to administer the estate
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will
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a legal document declaring a person's wishes regarding the disposal of their property when they die
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executor
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a person appointed by a testator to carry out the terms of the will
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savings accounts
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Hold money not spent on consumption.
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money market accounts
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Savings account that pays market rate or better interest and allows access to funds without penalty.
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certificates of deposit
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Time deposits that state the amount of the deposit, maturity, and rate of intrest being paid
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bonds
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a certificate issued by a government or private company which promises to pay back with interest the money borrowed from the buyer of the certificate: The city issued bonds to raise money for putting in new sewers.
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lending investments
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receiving money for loaning money
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stocks
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Shares of ownership in a corporation.
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mutual funds
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financial organization that pools people's money and invests it
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collectibles
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items that are relatively rare in number
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ownership investments
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making money for owning something
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securities
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All of the investments, including stocks, bonds, mutual funds, options, and commodities, that are traded.
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interest rate/coupon rate
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the percentage of a sum of money charged for its use
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face value
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the value of a security that is set by the company issuing it
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maturity date
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the date on which a financial obligation must be repaid
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issuer
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an institution that issues something (securities or publications or currency etc.)
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yield
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production of a certain amount
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bond rating
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an evaluation by a rating company of the probability that a particular bond issue will default
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zero-coupon bond
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common stock
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stock other than preferred stock
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perferred stock
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Shares which pay fixed dividends and have precedence over common stock.
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stock exchanges
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business organizations that accommodate the buying and selling of securities.
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shares outstanding
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the shares available to sell/buy
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market capitalization
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an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share
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mutual funds
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financial organization that pools people's money and invests it
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index fund
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a mutual fund that invests in the stocks that are the basis of a well-known stock or bond index
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exchange traded funds
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tracks specified market index, no capital gains or dividend distribution
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retirement planning
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By planning ahead you can ensure financial stability during your retirement.
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asset allocation
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The distribution of investment funds among broad classes of assets.
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vesting
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the point at which you become eligible to recieve the employer's pension plan contributions that you've gained, even if you leave the company before retiring.
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annual report
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a yearly statement of the financial condition, progress, and expectations of an organization
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SEC filings
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A document, usually containing financial data, that a company delivers to the SEC and, thereby, to the public.
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EDGAR
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Electronic Data Gathering Analysis and Retrieval, the electronic system used by the SEC to enable investors to search electronically for financial reports filed by individual companies
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financial statements
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Financial reports that summarize the financial condition and operations of a business
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balance sheets
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accounting statements that provide a snapshot of a company's financial position at a particular time
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income statement
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a financial statement that gives operating results for a specific period
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statement of cash flow
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a financial statement that shows a company's incoming and outgoing money during a time period (often monthly or quarterly)
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stockholder's equity
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The amount accruing to the corporations owners
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stock table
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can be found in a newspaper and shows information about popular stocks.
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stock symbol
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the letters used to identify listed companies on the securities exchanges where they are traded
