1. Chapter 11

3. – A savings account pays interest, has no maturity date, and allows funds to be withdrawn at any time without penalty.savings account – Money market deposit account (MMDA) pays relatively high rates of interest, requires a minimum balance of $1,000 to $2,500, and allows immediate access to funds. Money market deposit account  Time deposits require savers to leave their funds on deposit for certain periods of time, or maturity. Time depositsmaturity  Time deposits are often called certificates of deposit (CDs), or savings certificates.certificates of deposit

4.  After the stock market crash of 1929, the Federal Deposit Insurance Corporation (FDIC) was created to protect peoples’ funds.  Each person’s funds in a particular savings institution are insured up to $250,000.

5.  Corporations are formed by selling shares of stock.  Stockholders are people who have invested in a corporation and own some of its shares of stock. (They own part of the company)  You benefit from a stock in 2 ways: 1. Dividends 2. Selling it Capital Gain- Profit from stock- Sell it for more than you paid Capital Loss- sells stock at lower price then he bought it for.

7.  The government or a company borrowing money from you.  It promises to pay you a stated rate of interest for a specific period of time.  Savings Bond- range from $50 to $10,000. It is very safe and not taxed until cashed in. It is purchased at half the face value and increases every 6 months until maturity.

8. Types of retirement savings plans: – A pension plan is a company supported plan like a 401(k) that is not taxed until used.pension plan – A Keogh plan is a retirement plan for self- employed individuals.Keogh plan  An individual retirement account (IRA) is a private retirement plan for individuals.individual retirement account Contributions are deductible from taxable income. Taxed when taken out.

9. – A Roth IRA is a private plan for individuals.Roth IRA Taxes income before it is saved. Does not tax interest on that income when funds are used upon retirement. – Buying real estate, such as land and buildings, is another form of long term investing.

11.  How much to save and invest is determined by each individual’s income, risk tolerance, and values.  The higher the promised return on an investment, the greater the risk.  When you have very little income, you should probably put your savings lower risk accounts.  It is important to practice diversification to lower your overall risk.diversification  Your values may also determine where you invest your savings.

12. Stocks are shares of the Company. Savings bondsSavings bonds are issued by the federal government as a way of borrowing money.