Personal Finance Cheat Sheet 2

funnyguy541's version from 2016-12-23 19:41

Section 1

Question Answer
InvestmentsAssets which you have obtained in order to provide future increases in value
PortfolioA collection of investments
LiquidityThe ability of an asset to be converted to cash quickly and without any price discount
DividendA portion of company profits distributed to its shareholders
Bull MarketPeriod of rising prices. Bull's horns are high
Bear MarketPeriod of declining prices. Bear Hibernate, symbol for low

Section 2

Question Answer
Risk and ReturnRisk is uncertainty in how much of an investment could be lost. Generally, the higher the risk the higher the return and vice versa
InflationAs time passes, and costs of goods increase, a dollar will buy less and less value
Extra- Opposite of InflationDeflation
Opportunity CostAn estimate of the value you did not get from other possible uses of your money

Section 3

Question Answer
Common InvestmentsStocks,Bonds,Mutual Funds, Real Estate, Precious Metals, and Money Market
Stock?Ownership in a corporation
Bond?Lending money to an organization
Common Portfolio Management issuesLiquidity, Investment Income, Growth/Capital Gain, Risk, and Tax planning

Section 4

Question Answer
Interest RateAffects cost of borrowing. High interest tends to slow new investments because borrowing is more expensive.
What does Inflation affect?Affects price of goods and cost of living
Foreign Exchange RatesAffect the cost of travel, imported goods and services, and exported goods and services
Financial MarketsAffect the price of stocks, bonds, mutual funds, precious metals, commodities, and other types of investments
Government Spending and PolicyGovernment use various levers to speed up or slow down economic growth, such as tax, interest rates, and government spending.
Global EventsAffect the quantity and costs of imports and exports, foreign investments, and governments access to funds.

Section 5

Question Answer
Economical Indicatora set of statistical data that shows trends in the economy.
Leading IndicatorHelps predict trends of what may happen before the economy has actually changes.
Lagging IndicatorShows trends of change after the change has occured
Gross Domestic Product- Economic GrowthGDP is the total of all goods and services produced in a nation in a given year. Nominal GDP includes inflation. Real GDP does not.
Unemployment RateThe percentage of individuals in a nation who are actively seeking employment but do not currently have a full time or part time job
Consumer Price IndexCPI measures the rate of inflation by monitoring the average change in the price of several hundred goods and services in the country
Prime RateInterest rate set by major banks for loans to their best customers. Most people are offered interest rates at "Prime plus" some account
Other economic indicatiors-name 3Employment Growth,housing starts, motor vehicle sales, personal savings rate, value of the dollar

Section 6

Question Answer
Discount RateInterest rate at which banks borrow money from the government. In canada it is called the bank rate
Federal Funds RateInterest rate at which banks borrow money from other banks. In canada it is called overnight rate.
Prime RateInterest rate banks provide to their best customers. Each bank sets its own Prime Rate, but it is often based on (but higher than) the discount and federal funds rates.
Reserve RequirementMinimum level of cash a bank must have available for depositor withdrawals.

Section 7

Question Answer
Unethical Business PracticesBait and Switch advertising, greenwashing, shilling, spamming, pyramid scheme
Common Frauds and Scams-Name 3Telemarketers Promising Prizes, Opportunities to invest in fraudulent schemes, Bank Examiner con, Travel Companies giving free trips, the pigeon drop, funeral chasers, home repair, stolen checks, fake contests
Online Frauds and Scams- Name 3Virus, Worm, Phising, Spyware.

Section 8

Question Answer
$5Abraham Lincoln
$10Alexander Hamilton
$20Andrew Jackson
$50Ulysses S. Grant
$100Benjamin Franklin

Section 9