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 repairs- theater 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 pricesInvestors move $ from Market to fixed rate ,This reduces demand for stockLowers 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-for-1. 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.