Financial Terms and Concepts

Mutual Fund

• A type of investment that only focuses on stocks.

• A fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets.

• A savings account with a fixed interest rate.

• A government bond that guarantees returns.

Beneficiary

• A person who is responsible for managing an estate.

• One who benefits from something; a person who is left money or other property in a will or the like.

• A legal document outlining the distribution of assets.

• A person who is appointed to make decisions on behalf of another.

Deductible

• The total amount an insured person must pay for all claims in a year.

• The amount an insured person must pay before the insurance company pays on a claim.

• The percentage of a claim that the insurance company will cover.

• The maximum amount an insured person can claim in a year.

3 C's of Credit

• Character (credit history), Capacity (ability to repay), Capital (assets)

• Credit Score, Collateral, Conditions

• Character, Creditworthiness, Cash Flow

• Capital, Credit History, Compliance

Bull Market

• A period of rising stock prices.

• A period of falling stock prices.

• A market characterized by high volatility.

• A market where prices remain stable.

Emergency Fund

• A type of investment account for long-term growth.

• A savings account you can access quickly to pay for unexpected expenses or emergencies, usually 3-6 months of your salary.

• A checking account used for daily transactions.

• A retirement account that offers tax benefits.

Diversification

• Investing all funds in a single asset to maximize returns.

• Spreading out investments to reduce risks.

• Focusing on high-risk investments for higher returns.

• Investing in foreign markets only.

NASDAQ

• America's largest electronic stock market.

• A type of computer programming language.

• A popular social media platform.

• A global airline alliance.

Property damage liability insurance

• This protects against damage done to other people's cars or property by your car.

• This covers the cost of repairing your own vehicle after an accident.

• This provides coverage for medical expenses for injuries sustained in your car.

• This protects against theft of your vehicle.

Pay Yourself First

• A strategy to spend all your income before saving

• A method to prioritize savings by setting aside a portion of income first

• A guideline to avoid all forms of investment

• A rule to only save after all expenses are paid