Finance Vocabulary Flashcards
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Questions and Answers

What is a Savings Account?

  • A bank account that earns interest (correct)
  • A checking account
  • An investment account
  • A type of loan
  • What is Pocket Cash?

    The amount of money you have in your checking account or in cash that is readily available to spend.

    Define Investment.

    The action or process of investing money for profit or material result.

    What is an Interest Rate?

    <p>The amount you earn as profit based on how much you deposited, usually expressed as a percentage.</p> Signup and view all the answers

    What is an Emergency Fund?

    <p>A savings account that you can access quickly to pay for unexpected expenses or emergencies.</p> Signup and view all the answers

    Define Index Fund.

    <p>A mutual fund that invests in the stocks that are the basis of a well-known stock or bond index.</p> Signup and view all the answers

    What is a Certificate of Deposit (CD)?

    <p>A savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return.</p> Signup and view all the answers

    What is a Maturity Date?

    <p>The date on which an investment becomes due for payment.</p> Signup and view all the answers

    Define Stock Market.

    <p>A system for buying and selling shares of companies.</p> Signup and view all the answers

    What are Stocks?

    <p>Shares of ownership in a company.</p> Signup and view all the answers

    Define Mutual Fund.

    <p>A fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets.</p> Signup and view all the answers

    What is a Portfolio?

    <p>A collection of financial assets.</p> Signup and view all the answers

    Define Government Bonds.

    <p>Certificates sold by the government to raise money with the guarantee that the purchaser will be paid back later (with interest).</p> Signup and view all the answers

    What is the Commodities Market?

    <p>The market for the purchase and sale of commodity futures.</p> Signup and view all the answers

    Define Diversification.

    <p>Spreading out investments to reduce risk.</p> Signup and view all the answers

    What is Gold in financial terms?

    <p>A material that is used to signify a certain amount of money.</p> Signup and view all the answers

    Study Notes

    Banking and Savings

    • Savings Account: A bank account designed to earn interest on deposited funds, fostering savings over time.
    • Pocket Cash: Immediate cash available for expenditures, sourced from checking accounts or physical cash.
    • Emergency Fund: A dedicated savings account for unexpected expenses, ensuring quick access to funds when emergencies arise.

    Investments and Financial Instruments

    • Investment: The process of allocating money toward assets or ventures with the expectation of generating profit or value.
    • Index Fund: A mutual fund designed to replicate the performance of a specific stock or bond index, allowing diversification without selecting individual stocks.
    • Certificate of Deposit (CD): A time-bound deposit account that offers a fixed interest rate over a specified duration, typically with penalties for early withdrawal.
    • Maturity Date: The set date when the principal amount of an investment, such as a CD or bond, is due for repayment.

    Financial Markets

    • Stock Market: A marketplace for buying and selling equity in companies, allowing for public investment opportunities.
    • Stocks: Units of ownership in a corporation representing a claim on part of the company’s assets and earnings.
    • Mutual Fund: An investment vehicle pooling funds from multiple investors to invest in a diversified portfolio of stocks, bonds, and assets.

    Risk Management

    • Portfolio: A curated collection of an individual's or institution's financial assets, balancing risk and return.
    • Government Bonds: Debt securities issued by the government, providing a safe investment option with a promise of repayment plus interest.
    • Commodities Market: A marketplace focused on trading commodity futures and contracts, often for basic agricultural or mineral products.
    • Diversification: A strategy to spread investments across various asset classes to minimize overall risk and volatility.

    Asset Categories

    • Gold: A precious metal commonly recognized as a form of currency and investment, often acting as a hedge against inflation.

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    Description

    Test your knowledge of essential finance terms with these flashcards. Each term is defined clearly to help you understand key concepts related to savings, investments, and interest rates. Perfect for students and anyone looking to improve their financial literacy.

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