1. Unit 6: Personal Financial Decisions Review
TEKS E.17 The student understands the role of financial markets/institutions in saving, borrowing, and capital formation.
17A Explain the functions of financial institutions and how they affect households and businesses.

2. Personal Financial Decisions
17A continued
Technological developments have led the banking industry toward electronic banking
The technological advancement call smart card has led to the replacement of magnetic strip technology
Pension funds collect and invest income for later payments to eligible recipients
Credit Union: financial organization that is a nonprofit service cooperative
Finance Company: financial organization the specializes in buying installment contracts from merchants who sell on credit
Coupon Rate: Rate of return on a bond

3. Personal Financial Decisions
17B Explain how the amount of savings in an economy is the basis of capital formation.
In the flow of the financial system, people have a safe place to save, and borrowers have sources of financial capital
17C Analyze the role of interest and risk in allocating savings to its most productive use.
Savings accounts, buying certificates of deposit, & buying a insurance policy allow people to save money with little risk
People should invest in financial investment they understand

4. Personal Financial Decisions
17D Examine the types of accounts available to consumers from financial institutions and the risks, monetary costs, and benefits of maintaining these accounts.
A checking account is an example of a DDA
Successful investors invest consistent contributions over a long period of time
Certificates of Deposit (CDs) are a common investment because they require only a small investment and have various maturity dates
State & local governments issue tax exempt municipal bonds

5. Personal Financial Decisions
17D continued
The Dow Jones Industrial Average gives investors an overall picture of the value of markets
TEKS E.18 The student understands the role of individuals in financial markets.
18A Assess ways to be a wise investor in the stock market and in other personal investment options.
A diversified portfolio has many different investments
18B Explain how to begin a savings program.
People can save money in a passbook account

6. Personal Financial Decisions
18C Examine investment options available in a personal retirement plan.
Treasury bonds, savings bonds, and municipal bonds allow a person to invest in the government
18E Identify the types of loans available to consumers.
Unsecured loans are guaranteed only by a promise
Creditor: a financial institution that loans money
Borrower: an entity that takes out a loan
Collateral: a guarantee on a loan that insures the creditor will not lose money if the loan is unpaid
18F Explain the responsibilities and obligations of borrowing money
Borrowers pay interest on loans

7. Personal Financial Decisions
TEKS E.19 The student applies critical-thinking skills to analyze the costs and benefits of personal financial decisions.
19A examine ways to avoid and eliminate credit card debt
The Disadvantage of using Credit Cards is ending up with the equivalent of a never-ending loan
Living on a budget makes your life easier
19C Evaluate the costs and benefits of buying insurance.
Examples of popular types of insurance coverage: long-term care, disability, and life
In most states it is illegal to drive without liability insurance

8. Personal Financial Decisions
TEKS E.20 The student understands how to provide for basic needs while living within a budget.
20B Evaluate the costs and benefits of buying a home.
When buying a house through a loan, if you do not repay the money the bank can take the house as collateral
Fixed-Rate Mortgages: Interest rate remains the same
Adjustable-Rate Mortgages: Interest rates can vary over time

9. Personal Financial Decisions
TEKS E.21 The student understands the various methods available to pay for college and other postsecondary education and training.
21A Understand how to complete the Free Application for Federal Student Aid (FAFSA) provided by the United States Department of Education.
Students who want financial aid must compete the FAFSA application form

10. Personal Financial Decisions
TEKS E.22 The student applies critical-thinking skills to organize and use information acquired from a variety of valid sources, including electronic technology.
22A Analyze economic information by sequencing, categorizing, identifying cause-and-effect relationships, comparing, contrasting, finding the main idea, summarizing, making generalizations, and predictions, and drawing inferences and conclusions.
Mutual Funds offer an investor diversity in their investments