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Sources of Capital
vocab
32
Economics
12th Grade
03/29/2012

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Term
disposable income
Definition
money available after taxes have been paid
Term
balance
Definition
the amount of money in the account
Term
liquidity
Definition
the ease that an individual/business can convert assets into cash without suffering substantil monetary loss
Term
time deposits
Definition
account requiring one to leave money in an account for a specific amount of time
Term
maturity
Definition
length of time that money must be deposited
Term
savings rate
Definition
the percentage of people disposable income that isn't spent
Term
investment
Definition
purchase of something with value with the expectation that over time the value will increase and produce a profit
Term
budget
Definition
spending and saving plan
Term
fixed expenses
Definition
payment that remain constant from month to month
Term
flexible expenses
Definition
payments that can vary from month to month
Term
diversification
Definition
a person chooses a variety of investments
Term
real investment
Definition
use of money to create a new capital good
Term
capital accumulation
Definition
the expansion of the capital goods existing in an economy
Term
infrastructure
Definition
the basic facilities and services that an economy needs in order to function
Term
venture capital
Definition
individual or corporate funds that are invested in entrepreneurial enterprises to encourage economic growth
Term
capital gain
Definition
the profit earned through the sale of a capital asset
Term
capital loss
Definition
a loss that results when a capital asset, such as home, equipment, or investments, is sold for less than it cost
Term
stock split
Definition
an action by a corporation to divide its stock into a larger number of shares
Term
brokers
Definition
a person who carries out investors' orders to buy and sell stocks and bonds
Term
investment bank
Definition
a firm that buys large blocks of stocks and bonds issued by companies and then resells those securities to investors at a profit
Term
bull market
Definition
a financial market in which the price of stocks, bonds, or other traded commodities is generally on the rise and in which investors believe that prices will continue to rise
Term
bear market
Definition
a financial market in which the price of stocks, bonds, or other traded commodities is generally on the decline and in which investors believe that the prices will continue to fall
Term
yields
Definition
interest on money owned to a bondholder
Term
futures
Definition
a commodity that is bought in order to sell at an agreed-upon price and at an agreed-upon time in anticipation of profits <ex. wheat, corn, oats>
Term
prospectus
Definition
a fact sheet that provides detailed financial information about the company issuing the data
Term
installment
Definition
repeated partial payment made to financial institution or credit-extending organization to repay a loan or pay for goods or sevices that have been purchased
Term
credit rating
Definition
an estimation of the probability of repayment
Term
credit bureau
Definition
a business that specializes in collecting financial information about consumers
Term
finance charge
Definition
the total cost of credit expressed in dollars and cents
Term
annual percentage rate (APR)
Definition
the total cost of credit expressed as a yearly percentage
Term
usury
Definition
the act of charging borrowers a higher rate of interest than is allowed by law
Term
bankruptcy
Definition
legal process in which an individual or business whose debts exceed the value of their assets is forgiven those debts in excess of their assets  
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