Money - Assets that people are generally willing to accept in exchange

for goods and services or for payment of debts.

20 dollar bills, pennies, and dimes
Median of Exchange - anything that is used to determine value during
the exchange of goods and services
Cigarettes
Barter - Exchange goods without involving money.
Swapping a bag of nuts for a bag of fruit
Unit of account - A means for comparing the values of goods and
services
The unit of account function of money refers to the fact that

the prices of different goods are expressed in a common

monetary unit. For example, prices in the U.S. are expressed
in dollars. An example of this function of money might be
that the price of bread is $2/loaf and the price of wine is
$6/bottle. Without a common unit of account we would say
that a loaf of bread costs 1/3 bottle of wine and a bottle of
wine costs 3 loaves of bread
Store of Value - An item that people can use to transfer purchasing
power from the present to the future
A commodity like gold
Currency - Coins and paper bills used as money
Nickels
Commodity Money - objects that have value in themselves and that are
also used as money
Precious metals (silver, gold, platinum)
Representative Money - Objects that have value because the holder
can exchange them for something else of value
Flat money
Flat Money - money that has value because the government has
ordered that it is an acceptable means to pay debts
Gold
Gold Standard - a monetary standard under which the basic unit of
currency is defined by a stated quantity of gold
Trading $20.67 at the counter for an ounce of gold

6 Characteristics of money - organization, metabolism, responsiveness,

growth, development, reproduction
Banks
Banks - Financial institutions that accept deposits and make loans
US BANK
National Bank - Hamilton's big idea; fiercely opposed by Jefferson and
Democratic-Rep. The bank would regulate money and draw investors;
showed that the constitution could be construed in many a way.
National Bank of Omaha
Bank Run - A situation in which many depositors simultaneously decide
to withdraw money from a bank
Typically what happens as a result of panic
Greenbacks - Name for Union paper money not backed by gold or
silver. Value would fluctuate depending on status of the war (plural)
ThoughhehadbeenahardmoneyDemocrat,hejoinedthe

GreenbackpartyaftertheCivilWar,andin1876wasits
candidateforthepresidency,butreceivedonly81,740outof
the8,412,833votescast.
Federal Reserve System - 1913 - central banking system of the US created by the Federal Reserve Act
When you cash check or have money electronically transmitted
Central Bank - An institution designed to oversee the banking system
and regulate the quantity of money in the economy
TCF Bank
Member Bank - bank that belongs to the Federal Reserve System
Wells Fargo
Federal Reserve note - the national currency we use today in the
United States
Dollar bills
Great Depression - a hard time in American when there was no money
Dust bowl

Federal deposit insurance corporation - a federal government

guarantee of certain types of bank deposits for account balances of up
to $100,000.
The type of account a depositor holds affects the amount of

FDIC coverage he or she may have. For example, let's assume

you have three separate accounts at Bank XYZ: a checking
account holding $10,000, a second checking account holding
$50,000, and a $60,000 CD, for a total of $120,000 on deposit.
Ears in American Banking - the banks over draft rate
Bank offers periodic rates
Crisis - A sudden, unpredictable, and potentially dangerous event
requiring the president to play the role of crisis manager.
Getting an F on a paper
Money Supply - all the money available in the United States economy
Banks
Liquidity - Availability of resources to meet short-term cash
requirements.
Lets say you take an old painting from the attic to the local

filming of Antiques Roadshow. The expert says your painting is

worth $50,000
Demand Deposit - a bank deposit from which withdrawals can be made
without notice
Checking accounts
Money market mutual fund - a fund that pools money from small
savers to purchase short-term government and corporate securities
Baking and investing money into funds
fractional reserve banking - A banking system that keeps only a
fraction of funds on hand and lends out the remainder
US bank only lends out a little money
default - failure to act
Sally not acting quickly to catch the basketball
mortgage - A lien on real property as security for a debt. A special
contract by which the borrower conveys to the lender a security
interest in the mortgaged property.
House mortgage

credit card - a card (usually plastic) that assures a seller that the
person using it has a satisfactory credit rating and that the issuer will
see to it that the seller receives payment for the merchandise
delivered
Target credit card
Simple Interest - The amount of interest based on a principal amount
and not on earned interest.
US Bank taking a percentage of your money
Compound interest - interest calculated on both the principal and the
accrued interest
Lending money to a friend and having them pay 10% more each
month they go over when they finally return the money
principal - The amount of money borrowed
Debit card - a card (usually plastic) that enables the holder to withdraw
money or to have the cost of purchases charged directly to the holder's
bank account
Visa debit card
Creditor - A person to whom money is owed
Sharon B Johnson is a creditor at TCF Bank
Types of financial institutions - banks (banks, credit unions savings and
loans, internet banks) and non-banks (mutual fund companies and
brokerages)
Wells Fargo, American Express, Morningstar
Should the government increase regulation of financial markets - yes,
but there interference should be limited
Investment - Expenditures on (production of) new plant, equipment,
and structures (capital) in a given time period, plus changes in
business inventories.
Giving Jim $10,000 to start his business
Financial system - the group of institutions in the economy that help to
match one person's saving with another person's investment
In a business, system that enables lenders and borrowers to
exchange funds
financial asset - claim on the property or income of a borrower
Someone has partial ownership of a business

financial intermediary - Financial institutions through which savers can

indirectly provide funds to borrowers
Insurance companies, broke-dealers
mutual fund - a regulated investment company with a pool of assets
that regularly sells and redeems its shares
Stocks, bonds, money market instruments
diversification - A strategy for company growth through starting up or
acquiring businesses outside the company's current products and
markets

portfolio - A collection of financial assets

A business proposal
prospectus - formal proposal
Business Plan
return - Income earned on an investment
Income you get from working a job
risks - chances of loss or harm
Being member of the stock market
Bonds - A certificate issued by a government or private company which
promises to pay back with interest the money borrowed from the buyer
of the certificate: The city issued bonds to raise money for putting in
new sewers.
Money most people get when they are younger to help pay for
collge
Coupon rate - The annual coupon divided by the face value of a bond.
Daily coupons
Maturity - During the maturity stage of a products life cycle, sales
revenues continue to rise but at a much slower rate. Economics of
scale will give the firm a competitive advantage. Promotional activities
tend to focus on remaining customers.
Per value - the amount that investor pays to purchase a bond and that
will be repaid to the investor at maturity
A bond with a par value of $1,000 and a coupon rate of 4% will
have annual coupon payments of $40

Yield - For a savings account, the percentage of interest earned

annually. For a stock, the annual dividend divided by the share price.
Itishopedthataparallelantidumpinginvestigationwillyieldsimilar

results.
Savings bond - low-denomination bond issued by the United States
government
Money most kids get for college when they are older
Municipal bond - a bond issued by a state or local government or
municipality to finance such improvements as highways, state
buildings, libraries, parks and schools
Local government of Chanhassen issuing a bond to help libraries
Corporate bond - A bond that a corporation issues to raise money to
expand its business
Fundraising for companies
Securities and exchange commission - monitors the stock market and
enforces laws regulating the sale of stocks and bonds
Suzy monitors the stock market to make sure everything is being
fair
Junk bond - a lower-rated, potentially higher-paying bond
A bond thats worth more
Capital market - Market in which money is lent for periods longer than
a year
New york stock exchange
money market - A mutual fund or account that invest in short-term,
liquid investments. these funds generally pay better that a savings
account with a bank, but less than a typical stock mutual fund. These
funds are considered very low risk.
Commercial paper
Primary market - Market for selling financial assets that can only be
redeemed by the original holder
When the original holder rebuys there assets
Secondary market - market for reselling financial assets
The fish mart resells there financial assets

Buying bonds at a discount - -T-bills: government asks investors this

question: how much will you loan us today if we promise to repay you
10,000 in one year from now
When bonds go on sale
Bond ratings - Aid in determining interest rates and reserves; may
assist in issuance of bonds.
A grade assigned to a bond
Treasury bonds - US government obligations with original maturities of
more than 10 years. They are issued in $1000 denominations and pay
interest semiannually
Default-free securities
Treasury bills - U.S. government obligations generally issued with 4, 13,
and 26 week maturities.
Default-free securities
Treasury notes - certificates issued by the US Treasury in exchange for
minimum amounts of $1,000 and maturing in 1 to 10 years
Default-free securities
Share - A system used on southern farms after the Civil War in which
farmers worked land owned by someone else in return for a small
portion of the crops.
Google share
Equities - Financial rights to the assets of a business
ownership
Capital gain - the amount by which the selling price of an asset
exceeds the purchase price
Sale price+purchase price
Capital loss - The difference between a lower selling price and a higher
purchase price resulting in a financial loss for the seller
Purchase price sale price
Stock split - The division of a single share of stock into more than one
share
Google share being split in half
Stockbroker - A person who links buyers and sellers of stock

Chris Gardner

Brokerage firm - a business that specializes in trading stocks

When a trade order for a stock is carried out, an individual often
pays a transaction fee for the brokerage companys efforts to
execute the trade
Stock exchange - A market for buying and selling stock
Buying the Google and apple stock
Nasdaq - American market for OTC securities
Index bonds
OTC market - an electronic marketplace for stocks and bonds
Marketplaces on the computer
futures - Contracts to buy or sell at a specific date in the future at a
price specified today
The New York Mercantile
options - Contracts that give investors the choice to buy or sell stock
and other financial assets
Personal things you think
Call option - The option to buy shares of stock at a specified time in the
future
Buying a stock now or in the feature
Put option - The option to sell shares of stock at a specified time in the
future
Selling stocks now or in the future
Bull vs bear market - bull is the market looks or is going bad and bear
is the market looking good
Bull market of 1901
Dow jones industrial average - The average cost of 30 selected stocks,
used to give an indication of the direction (up or down) of the stock
market over time.
Logic used to decide the DJIA companies
S&P 500 - index that shows the price changes of 500 different stocks
Pricing of stocks increasing

Great crash - the collapse of the stock market in 1929

When the stock market crashed
Speculation - An involvement in risky business transactions in an effort
to make a quick or large profit.
Pork bellies
Daytrading - Trying to predict a minute by minute prince change based
on computer programs that tell traders when to buy and sell.
Gambling on predicting the price
Fate of the dot-coms - company doing business mainly on the internet
Amazon