Shared Flashcard Set

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Personal Finance
Part I - Chapter 1, 2, and 3
16
Finance
Graduate
07/27/2020

Additional Finance Flashcards

 


 

Cards

Term
adult life cycle
Definition
The stages in the family situation and financial needs of an adult.
Term
annuity
Definition
A series of equal amounts (deposits or withdrawals) made at regular time intervals.
Term
bankruptcy
Definition
A set of federal laws that allow you to either restructure your debts or remove certain debts.
Term
compounding
Definition
A process that calculates interest based on previously earned interest.
Term
economics
Definition
The study of how wealth is created and distributed.
Term
financial plan
Definition
A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities.
Term
future value
Definition
The amount to which current savings will increase based on a certain interest rate and a certain time period; typically involves compounding.
Term
inflation
Definition
A rise in the general level of prices.
Term
life cycle approach
Definition
The idea that the average person goes through four basic stages in personal financial management.
Term
liquidity
Definition
(1) The ability to readily convert financial resources into cash without a loss in value; (2) the ability to buy or sell an investment quickly without substantially affecting the investment’s value.
Term
opportunity cost
Definition
What a person gives up by making a choice.
Term
personal financial planning
Definition
The process of managing your money to achieve personal economic satisfaction.
Term
present value
Definition
The current value for a future amount based on a certain interest rate and a certain time period; also referred to as discounting.
Term
simple interest
Definition
Interest computed on the principal, excluding previously earned interest.
Term
time value of money
Definition
Increases in an amount of money as a result of interest earned. This means that a dollar saved or invested today will in time, increase the value of that money down the road, such as with an RRSP/term investment.
Term
values
Definition
Ideas and principles that a person considers correct, desirable, and important.
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