Term
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Definition
| The amount to which a cash flow or series of cash flows will grow over a period of time when compounded at a given interest rate |
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Term
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Definition
| The value today of a future cash flow or series of cash flows |
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Term
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Definition
| The process of finding the present value of a future cash flow or series of future cash flows; it is the reverse of compounding |
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Term
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Definition
| A series of payments of equal amounts at equal intervals for a specified number of periods |
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Term
| Ordinary (deferred) Annuity |
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Definition
| An annuity whose payments occur at the end of each period |
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Term
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Definition
| Designates constant cash flows - that is, an annuity stream |
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Term
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Definition
| Designates constant cash flows in general, both constant cash flows and uneven cash flows |
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Term
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Definition
| The process of determining the future (present) value of a cash flow or series of cash flows when interest is added twice a year |
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Term
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Definition
| rsimple is used to compute the interest paid per period |
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Term
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Definition
| the annual rate of interest actually being earned |
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Term
| Annual Percentage Rate (APR) |
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Definition
| Period rate times the number of periods per year |
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Term
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Definition
| A loan that is repaid in equal payments over its life; payment includes both principal repayment and interest |
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Term
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Definition
| Using time value of money concepts, we realize that the value of anything is based on the present value of the cash flows, the asset is expected to produce in the future |
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Term
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Definition
| the return investors consider appropriate for holding such an asset - usually referred to as the required return |
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Term
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Definition
| Required rate of return on a debt instrument |
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Term
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Definition
| number of years before the bond matures |
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Term
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Definition
| dollars of interest paid each year |
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Term
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Definition
| par or face value of the bond to be paid off at maturity |
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Term
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Definition
| The annual interest payment on a bond divided by its current market value |
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Term
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Definition
| A bond that sells below its par value, which occurs whenever the going rate of interest rises abouve the coupon rate |
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Term
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Definition
| A bond that sells above its par value, which occurs whenever the going rate of interest falls below the coupon rate |
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Term
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Definition
| The risk of changing bond prices to which investors are exposed due to changing interest rates |
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Term
| Interest Rate Reinvestment Risk |
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Definition
| The risk that income from a bond portfolio will vary because cash flows have to be reinvested at current market rates |
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Term
| Two Factors: Value of a Bond |
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Definition
| Stream of interest payments and principal repayment at maturity |
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Term
| Interest Rate Increase: How does this affect your bond? |
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Definition
| It will cause the price of an outstanding bond to fall |
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Term
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Definition
| It will cause the price of your bond to rise |
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Term
| Two Types of Student Loans |
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Definition
1. Subsidized (need based, no acc. interest, interest starts post-grad)
2. Unsubsidized (non-need based, interest accrues immediately) |
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Term
| 4 steps for paying off student loans |
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Definition
1. Find out what type of loans you have
2. Determine your interest rate for each loan
3. Choose a repayment plan
4. Try to make extra payments |
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Term
| 4 types of Repayment plans |
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Definition
1. Standard (Set payments up to 10 years)
2. Extended Repayment (More than 30K, Up to 25 years)
3. Graduated Repayment
4. Income-base repayment |
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Term
| 4 types of Repayment plans |
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Definition
1. Standard (Set payments up to 10 years)
2. Extended Repayment (More than 30K, Up to 25 years)
3. Graduated Repayment
4. Income-base repayment |
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Term
| Rules for Choosing a Credit Card |
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Definition
1. Limit the number that you have
2. Lowest interest rate possible
3. Credit Limit
4. Stay away from fees!
5. Make your card work for you! |
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Term
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Definition
1. Excellent - 750 and above
2. Good - 720 to 749
3. Fair - 660 to 719
4. Uncertain - 620 to 659
5. Poor - 619 and lower |
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Term
| How your Credit Score is Rated |
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Definition
1. Payment History (35%)
2. Amount Owed (30%)
3. Length of Credit History (15%)
4. New Credit (10%)
5. Types of Credit Used (10%) |
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Term
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Definition
| Equifax, Experian, Transunion |
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Term
| How to Build your Credit Score |
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Definition
1. Pay bills on time
2. Pay off credit cards in full every month
3. Choose the right credit cards
4. Keep the amount you owe low
5. Give it time?
6, Open up a checking and savings account |
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