PERSONAL FINANCE FBLA Study
Guide Questions and Verified Solutions
Elaborated
Annuity
a form of insurance or investment entitling the investor to a series
of annual sums.
Real Estate
Regarding to investments in properties consisting of land and
buildings.
Stocks
Securities that represent part ownership or equity in a corporation.
Can be invested in multiple ways from day-trading to long-term
holding.
Trust Will
A will is a legal document that spells out how you want your
affairs handled and assets distributed after you die.
A fiduciary arrangement whereby a grantor (also called a trustor)
gives a trustee the right to hold and manage assets for the benefit
of a specific purpose or person.
Simple Will
a legal document that states who will inherit your assets and
belongings after you pass away.
Codicil
a legal document that dictates any modifications or amendments
to your last Will and Testament.
Holographic Will
is an unattested will that is written and signed in the testator's own
handwriting.
,Bond default
occurs when the issuer of the bond fails to make interest or
principal payments within the specified period.
a sign of financial distress, lack of money
Short selling
sell stock or other securities or commodities which one does not
own at the time, in the hope of buying at a lower price before the
delivery time.
bond redemption
the full repayment of the principal amount (the amount you
invested) and any interest owed to date.
Hedging
to take an offsetting position in an asset or investment that
reduces the price risk of an existing position.
Compound interest
interest earned on both the principal amount and any interest
already earned
Adjustable interest
have an interest rate that may change periodically depending on
changes in a corresponding financial index that's associated with
the loan.
Value-added interest
used to measure the value a company generates from funds
invested in it.
Back-end load
a sales charge paid when you sell an investment
Front-end load
Commission or sales charge paid when purchasing shares
Capital gain
a profit from the sale of property or of an investment.
, Dividends
Company's share profits to the shareholders based on the
corporation's performance.
Maker
the party in a promissory note who is making the promise to pay
Payee
A person to whom a check is written and cashes the check
Depositor
One who makes a deposit, or has an amount deposited.
Voluntary Compliance
A system of compliance that relies on individual citizens to report
their income freely and voluntarily, calculate their tax liability
correctly, and file a tax return on time.
Pay-as-you-go
users pay for only the services they consume
the ability-to-pay principle
principle of taxation in which those with higher incomes pay more
taxes than those with lower incomes, regardless of the number of
government services they use
the graduated income tax system
a structure where the tax rate increases as the taxable amount
increases. So, taxpayers who earn more will pay more taxes.
Commercial bank
a for-profit institution that offers a full range of financial services,
including checking, savings, and lending. Has the widest variety
of financial services.
Credit union
A nonprofit financial institution that is owned by its members and
organized for their benefit.
Savings bank
Guide Questions and Verified Solutions
Elaborated
Annuity
a form of insurance or investment entitling the investor to a series
of annual sums.
Real Estate
Regarding to investments in properties consisting of land and
buildings.
Stocks
Securities that represent part ownership or equity in a corporation.
Can be invested in multiple ways from day-trading to long-term
holding.
Trust Will
A will is a legal document that spells out how you want your
affairs handled and assets distributed after you die.
A fiduciary arrangement whereby a grantor (also called a trustor)
gives a trustee the right to hold and manage assets for the benefit
of a specific purpose or person.
Simple Will
a legal document that states who will inherit your assets and
belongings after you pass away.
Codicil
a legal document that dictates any modifications or amendments
to your last Will and Testament.
Holographic Will
is an unattested will that is written and signed in the testator's own
handwriting.
,Bond default
occurs when the issuer of the bond fails to make interest or
principal payments within the specified period.
a sign of financial distress, lack of money
Short selling
sell stock or other securities or commodities which one does not
own at the time, in the hope of buying at a lower price before the
delivery time.
bond redemption
the full repayment of the principal amount (the amount you
invested) and any interest owed to date.
Hedging
to take an offsetting position in an asset or investment that
reduces the price risk of an existing position.
Compound interest
interest earned on both the principal amount and any interest
already earned
Adjustable interest
have an interest rate that may change periodically depending on
changes in a corresponding financial index that's associated with
the loan.
Value-added interest
used to measure the value a company generates from funds
invested in it.
Back-end load
a sales charge paid when you sell an investment
Front-end load
Commission or sales charge paid when purchasing shares
Capital gain
a profit from the sale of property or of an investment.
, Dividends
Company's share profits to the shareholders based on the
corporation's performance.
Maker
the party in a promissory note who is making the promise to pay
Payee
A person to whom a check is written and cashes the check
Depositor
One who makes a deposit, or has an amount deposited.
Voluntary Compliance
A system of compliance that relies on individual citizens to report
their income freely and voluntarily, calculate their tax liability
correctly, and file a tax return on time.
Pay-as-you-go
users pay for only the services they consume
the ability-to-pay principle
principle of taxation in which those with higher incomes pay more
taxes than those with lower incomes, regardless of the number of
government services they use
the graduated income tax system
a structure where the tax rate increases as the taxable amount
increases. So, taxpayers who earn more will pay more taxes.
Commercial bank
a for-profit institution that offers a full range of financial services,
including checking, savings, and lending. Has the widest variety
of financial services.
Credit union
A nonprofit financial institution that is owned by its members and
organized for their benefit.
Savings bank
