Download PERSONAL FINANCE TEST B - Cardinal Spellman High School

PERSONAL FINANCE
EXAM B
Disability Insurance
• Disability Insurance, often called DI or
disability income insurance, is a form of
insurance that insures the beneficiary's
earned income against the risk that
disability will make working (and therefore
earning) impossible. It includes paid sick
leave, short-term disability benefits, and
long-term disability benefits.[1]
Treasury Department
• The Department of the Treasury is an
executive department and the treasury of the
United States federal government. It was
established by an Act of Congress in 1789 to
manage government revenue. The Department
is administered by the Secretary of the Treasury,
who is a member of the Cabinet. Bank deposits
greater than $10,000.00– reported to treasury
dept------illegal activity, launder money
Face Value-Death Benefit
• Life insurance or life assurance is a
contract between the policy owner and the
insurer, where the insurer agrees to pay a
designated beneficiary a sum of money
upon the occurrence of the insured
individual's or individuals' death or other
event, such as terminal illness or critical
illness. In return, the policy owner agrees
to pay a stipulated amount at regular
intervals or in lump sums.
Cash value whole life insurance
• Permanent life insurance is a form of life
insurance such as whole life or
endowment, where the policy is for the life
of the insured, the payout is assured at the
end of the policy (assuming the policy is
kept current) and the policy accrues cash
value.
• Premium paid + interest earned
Insurance Floater
• Covers replacement cost or repairstheater like TV, Fur, Jewelry—
• Cost extra premium
• Jewelry-@ PROPERTY OR OFF
PROPERTY
• Computer in Auto
• Covers a specific article of value
Higher Interest rates depress stock prices
Investors move $ from Market to fixed rate ,
This reduces demand for stock
Lowers stock prices
A certificate of deposit or CD is a time deposit,
a financial product commonly offered to consumers
by banks, thrift institutions, and credit unions.
CDs are similar to savings accounts in that they are
insured and thus virtually risk-free; they are "money
in the bank" (CDs are insured by the FDIC for banks
or by the NCUA for credit unions). They are different
from savings accounts in that the CD has a specific,
fixed term (often three months, six months, or
one to five years), and, usually, a fixed interest rate.
Credit Union
• A credit union is a cooperative financial
institution that is owned and controlled by
its members and operated for the purpose
of promoting thrift, providing credit at
reasonable rates, and providing other
financial services to its members.[1][2][3]
Many credit unions exist to further
community development[4] or sustainable
international development on a local
level.[5]
Inflation
• In economics, inflation is a rise in the
general level of prices of goods and
services in an economy over a period of
time.[1] When the price level rises, each
unit of currency buys fewer goods and
services; consequently, inflation is also an
erosion in the purchasing power of money
– a loss of real value in the internal
medium of exchange and unit of account
in the economy.[2
CPI
• A chief measure of price inflation is the
inflation rate, the annualized percentage
change in a general price index (normally
the Consumer Price Index) over time.[4]
• Inflation's effects on an economy are
manifold and can be simultaneously
positive and negative
US SAVINGS BOND
• Series EE bonds are issued at 50% of
their face value and reach final maturity 30
years from issuance. Interest is added to
the bond monthly and paid when the
holder cashes the bond. They are
designed to reach face value in
approximately 17 years, although an
investor can hold them for up to 30 years
and continue to accrue interest.
US SAVINGS BOND
• Series EE bonds are designed for
individual investors, sold at a discount,
and redeemed at an amount that includes
the interest income. Hence, while interest
is calculated monthly, the interest on a
Series EE bond is not paid until
redemption.
• EXEMPT FROM STATE & LOCAL TAXES
On line banking saves the bank expenses.
The bank does not keep copies of the checks.
Save $ on USPS
TIME VALUE OF MONEY
• The time value of money is the value of money figuring
in a given amount of interest earned over a given
amount of time.
• For example, 100 dollars of today's money invested for
one year and earning 5 percent interest will be worth 105
dollars after one year. Therefore, 100 dollars paid now or
105 dollars paid exactly one year from now both have
the same value to the recipient who assumes 5 percent
interest; using time value of money terminology, 100
dollars invested for one year at 5 percent interest has a
future value of 105 dollars.[1] This notion dates at least
to Martín de Azpilcueta (1491-1586) of the School of
Salamanca.
• COMPOUNDING INTEREST
STOCK SPLIT
• Take, for example, a company with 100
shares of stock priced at $50 per share.
The market capitalization is 100 × $50, or
$5000. The company splits its stock 2-for1. There are now 200 shares of stock and
each shareholder holds twice as many
shares. The price of each share is
adjusted to $25. The market capitalization
is 200 × $25 = $5000, the same as before
the split.
Supply & Demand
• The price of stock or equity change based
upon the law of supply & demand.
• REGISTERED STOCK BROKERS BUY &
SELL SECURITIES & BONDS FOR
INVESTORS
• A CHECK DEPOSIT –NEEDS TO BE ON
DEPOSIT FOR SEVERAL DAYS TO
BECOME CASH----------CLEAR
BOUNCED CHECK
• Non-sufficient funds (NSF) is a term used in
the banking industry to indicate that a demand
for payment (a check) cannot be honored
because insufficient funds are available in the
account on which the instrument was drawn. In
simplified terms, a check has been presented for
clearance, but the amount written on the check
exceeds the available balance in the account.
An NSF check is often referred to as a bad
check or dishonored check, or more
colloquially, a bounced check, cold check,
rubber check, or hot check.