vocab pt. 2
41) mutual company
A type of insurance company that returns part of the profits of the company to its policyholders.
42) independent agency
Created by Congress to address concerns that go beyond the scope of ordinary legislation.
43) passbook accounts
Another way of saying "savings accounts."
44) credit unions
Depositors are the owners of ______.
45) prime rate
Interest rate charged by banks to their best corporate borrowers.
46) whole life insurance
Life insurance policy that remains in force for the insured's whole life. Advantage = cash values can build up that policy holders can borrow against later.
47) teller
An entry-level position at a financial institution.
48) euro
A new currency used by members of the European union.
49) commercial bank
Primary lending function is to help business owners who want to expand.
50) suitability
An important element in determining proper business practices. Financial professionals recommend financial products based on the client's financial, social, and emotional circumstances.
51) defensive stocks
Those likely to have share prices that are more volatile that those of growth stocks. Most popular when economic outlook is not very positive.
52) trust department
This part of a bank would be most likely to manage money for a 12-year-old who received an inheritance.
53) cashier's check
A check drawn on the bank's own funds, often requested by seller to be assured of payment.
54) M1
The narrowest definition of the money supply. Includes currency, travelers' checks, and balances in checking accounts.
55) fractional reserve banking
A certain percentage of any deposit that is placed in the vault while the remainder is lent out/invested by the bank.
56) junk bonds
A colloquial term for a high-yield or non-investment grade bond. Junk bonds are fixed-income instruments so called because of their higher risk. However, they have speculative appeal because they offer much higher yields than safer bonds. Companies that issue junk bonds typically have less-than-stellar credit ratings, and investors demand these higher yields as compensation for the risk of investing in them. A junk bond issued from a company that manages to have its credit rating upgraded will generally have a substantial price appreciation.
57) bond rating
A grade given to bonds that indicates their credit quality. Private independent rating services such as Standard & Poor's, Moody's and Fitch provide these evaluations of a bond issuer's financial strength, or its the ability to pay a bond's principal and interest in a timely fashion.
58) AAA and AA
Highest bond rating; high credit-quality investment grade.
59) AA and BBB
Medium credit-quality investment grade.
60) BB, B, CCC, CC, C
Low credit-quality (non-investment grade), or "junk bonds."
A type of insurance company that returns part of the profits of the company to its policyholders.
42) independent agency
Created by Congress to address concerns that go beyond the scope of ordinary legislation.
43) passbook accounts
Another way of saying "savings accounts."
44) credit unions
Depositors are the owners of ______.
45) prime rate
Interest rate charged by banks to their best corporate borrowers.
46) whole life insurance
Life insurance policy that remains in force for the insured's whole life. Advantage = cash values can build up that policy holders can borrow against later.
47) teller
An entry-level position at a financial institution.
48) euro
A new currency used by members of the European union.
49) commercial bank
Primary lending function is to help business owners who want to expand.
50) suitability
An important element in determining proper business practices. Financial professionals recommend financial products based on the client's financial, social, and emotional circumstances.
51) defensive stocks
Those likely to have share prices that are more volatile that those of growth stocks. Most popular when economic outlook is not very positive.
52) trust department
This part of a bank would be most likely to manage money for a 12-year-old who received an inheritance.
53) cashier's check
A check drawn on the bank's own funds, often requested by seller to be assured of payment.
54) M1
The narrowest definition of the money supply. Includes currency, travelers' checks, and balances in checking accounts.
55) fractional reserve banking
A certain percentage of any deposit that is placed in the vault while the remainder is lent out/invested by the bank.
56) junk bonds
A colloquial term for a high-yield or non-investment grade bond. Junk bonds are fixed-income instruments so called because of their higher risk. However, they have speculative appeal because they offer much higher yields than safer bonds. Companies that issue junk bonds typically have less-than-stellar credit ratings, and investors demand these higher yields as compensation for the risk of investing in them. A junk bond issued from a company that manages to have its credit rating upgraded will generally have a substantial price appreciation.
57) bond rating
A grade given to bonds that indicates their credit quality. Private independent rating services such as Standard & Poor's, Moody's and Fitch provide these evaluations of a bond issuer's financial strength, or its the ability to pay a bond's principal and interest in a timely fashion.
58) AAA and AA
Highest bond rating; high credit-quality investment grade.
59) AA and BBB
Medium credit-quality investment grade.
60) BB, B, CCC, CC, C
Low credit-quality (non-investment grade), or "junk bonds."