PERSONAL FINANCE

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PERSONAL FINANCE

• EXAM E

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Face value, Death benefit, Face amount

• The "face value" of a life insurance policy is
  the death benefit. However it's subject to other
  clauses in the policy. ExamplesIf the policy
  has a "double indemnity" clause, the beneficiary
  receives double the face value in case of
  accidental death. Not all life insurance earns
  interest or dividends and some term policies have
  a "decreasing face value" clause or payout based
  on the aging of the insured each year. Don't
  confuse "current coverage or "current value" with
  "face value".

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AUTO INSURANCE, HOMEOWNER INSURANCE

• Coverage expires 1201 AM on expiration date.
• Expiration Date 1 March 2011
• Auto accident, House fire, Robbery
• 1 March 2011 _at_ 10 AM
• NOT COVEREDNO INSURANCE
• February 28, 2010 1145 PM YES COVERAGEYOU ARE
  COVERED

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CASH VALUE WHOLE LIFE INSURANCE

• Whole Life Insurance is designed to provide
  coverage for the life of the insured. Whole life
  policies generally offer fixed premiums,
  guaranteed death benefits and are designed to
  build tax deferred cash value. For that reason, a
  whole life insurance policy can be described as
  providing life insurance protection with a
  savings feature. PREMIUM PD INTEREST EARNED

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EXEMPT FROM STATE LOCAL TAX

• INTEREST
• RATE
• ON
• US
• SAVINGS
• BONDS

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DIVIDEND REINVESTMENT PLAN

• A dividend reinvestment program or dividend
  reinvestment plan (DRIP) is an equity investment
  option offered directly from the underlying
  company. The investor does not receive quarterly
  dividends directly as cash instead, the
  investor's dividends are directly reinvested in
  the underlying equity. (The investor must still
  pay tax annually on his or her dividend income,
  whether it is received or reinvested.)
• ACQUIRE ADDITIONAL SHARES OF STOCK

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STOCK SPLIT

• A stock split is a decision by the
  company's board of directors to increase the
  number of shares that are outstanding by issuing
  more shares to current shareholders. For example,
  in a 2-for-1 stock split, every shareholder with
  one stock is given an additional share. So, if a
  company had 10 million shares outstanding before
  the split, it will have 20 million shares
  outstanding after a 2-for-1 split. 

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STOCK SPLIT

• A stock's price is also affected by a stock
  split. After a split, the stock price will be
  reduced since the number of shares outstanding
  has increased. In the example of a 2-for-1 split,
  the share price will be halved. Thus, although
  the number of outstanding shares and the stock
  price change, the market capitalization remains
  constant.

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Security Exchange Commission

• The mission of the U.S. Securities and Exchange
  Commission is to protect investors, maintain
  fair, orderly, and efficient markets, and
  facilitate capital formation. Police of security
  industry.
• A company must register with the SEC BEFORE IT
  CAN RASISE CAPITAL BY SELLING STOCK BONDS.

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SEC

• The Securities and Exchange Commission (SEC) is
  charged with protecting investors and maintaining
  fair and efficient capital markets. SEC
  regulations govern the activities of individuals
  and organizations involved in the sale of
  securities, including brokers and brokerage
  firms. The SEC operates at a high level, however,
  and does not recoup losses for individual
  investors.

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Time Value of Money (TVM)

• Investopedia explains Time Value of Money
  (TVM)Everyone knows that money deposited in a
  savings account will earn interest. Because of
  this universal fact, we would prefer to receive
  money today rather than the same amount in the
  future.For example, assuming a 5 interest
  rate, 100 invested today will be worth 105 in
  one year (100 multiplied by 1.05).  Conversely,
  100 received one year from now is only worth
  95.24 today (100 divided by 1.05), assuming a
  5 interest rate.

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CERTIFICATE OF DEPOSIT

• Investopedia explains Certificate Of Deposit -
  CDA certificate of deposit is a promissory note
  issued by a bank. It is a time deposit that
  restricts holders from withdrawing funds on
  demand. Although it is still possible to withdraw
  the money, this action will often incur a
  penalty. For example, let's say that you
  purchase a 10,000 CD with an interest rate of 5
  compounded annually and a term of one year. At
  year's end,  the CD will have grown to 10,500
  (10,000 1.05).

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TVM10K TODAY OR 10 K 3 YRS FROM NOW

• If you're like most people, you would choose to
  receive the 10,000 now. After all, three years
  is a long time to wait. Why would any rational
  person defer payment into the future when he or
  she could have the same amount of money now? For
  most of us, taking the money in the present is
  just plain instinctive. So at the most basic
  level, the time value of money demonstrates that,
  all things being equal, it is better to have
  money now rather than later.

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INTEREST RATE

• Investopedia explains Interest RateInterest is
  charged by lenders as compensation for the loss
  of the asset's use. In the case of lending money,
  the lender could have invested the funds instead
  of lending them out. With lending a large asset,
  the lender may have been able to generate income
  from the asset should they have decided to use it
  themselves.

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INFLATION

• What Does Inflation Mean?The rate at which the
  general level of prices for goods and services is
  rising, and, subsequently, purchasing power is
  falling. Central banks attempt to stop severe
  inflation, along with severe deflation, in an
  attempt to keep the excessive growth of prices to
  a minimum.

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INFLATION

• Investopedia explains InflationAs inflation
  rises, every dollar will buy a smaller percentage
  of a good. For example, if the inflation rate is
  2, then a 1 pack of gum will cost 1.02 in a
  year. Most countries' central banks will try to
  sustain an inflation rate of 2-3.

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INSURANCE PERSONAL FLOTER

• What Does Floater Insurance Mean?A type of
  insurance policy that covers property that is
  easily movable and provides additional coverage
  over what normal insurance policies do not. This
  can cover anything from jewelry to expensive
  stereo equipment. COST ADDITIONAL PREMIUM!!!!!!