About This Chapter
Personal Finance: Savings & Investments - Chapter Summary
The video and text lessons in this chapter discuss the institutions that offer savings accounts as well as the firms that monitor investments for clients. Learn about the benefits and disadvantages of using different types of financial institutions or agencies. Identify the differences between stocks, savings accounts, exchange-traded funds, bonds, and mutual funds.
Our instructors have outlined certain facts that all investors should know, such as the potential for loss with investments and guidelines for risk management. The lessons in this chapter also provide guidance with understanding how financial institutions determine credit worthiness. Better credit usually means better interest rates, and these lessons examine the various types of interest rates investors commonly encounter. Upon completing this chapter, you should know more about the following:
- Fixed and variable interest rates
- Financing options
- Risk management
- Risk and return
- Investment opportunities
- Savings accounts
Study.com offers brief and entertaining video lessons along with text lessons that help you focus on the topics you need to learn. There are video tags attached to each lesson, so you can go from one main topic to another with ease. Full transcripts with bolded keywords help you identify important information. In addition, our instructors are always available to provide you with more guidance, so feel free to contact them. Lastly, you can evaluate how much you've learned by taking lesson quizzes and chapter exams.
1. Types of Financial Institutions: Definition, Examples & Roles
In this lesson, we'll explore three types of financial institutions and their roles in financial intermediation. By the end of the lesson, you should also be able to provide an example or two of each type of institution, some of which you may have already used in real life.
2. What is a Savings Account? - Definition & Types
People use savings accounts to invest their money for short periods of time. They are the most simple, liquid types of short-term investments. Learn about some basic types of savings accounts and then test your knowledge with a quiz.
3. Investment Opportunities in Stocks and Bonds
Investors often turn to the stock and bond markets when investing their money. Each market offers opportunities and risks for the individual investor. In this lesson, we'll explore the nature of these investments.
4. Investment Opportunities in Mutual Funds and Exchange-Traded Funds
Investing in the stock market is not limited to individual stocks. Investors can also invest in mutual funds and exchange-traded funds. In this lesson, you'll learn about these opportunities, as well as their advantages and disadvantages.
5. Risk and Return in Insurance & Risk Management Strategies
In this lesson, we'll define risk and return as it relates to the insurance industry, and you'll understand the correlation between the two. We'll also explore three risk management strategies and give examples of each.
6. Ways to Manage Risk: Insurable and Uninsurable Risk
Risks abound in life and in business. However, most risks can be managed. In this lesson, you'll learn about ways to manage risks. You'll also learn the difference between insurable and uninsurable risks. A short quiz follows.
7. Factors That Affect Credit Worthiness
Access to credit to pay for education, a house, a car or other items is an important part of managing personal finances. In this lesson, you'll learn what factors lenders consider when deciding whether to loan someone money and what interest rate they will charge.
8. Comparing Variable & Fixed Interest Rate Loans
Most people, at some point in their lives, will experience the process of getting a loan - perhaps for a house, car, education or something else. This lesson will describe the difference between the two types of interest rates commonly offered.
9. What Is Financing? - Definition & Types
People borrow money to purchase homes, cars, boats, or anything else they don't have the money for at the moment they want to make the purchase. In this lesson, learn what financing is, as well as different types of financing used every day.
10. What is Interest Rate? - Definition, Types & History
Everything costs money, even money. In this lesson, you'll learn about interest rates - specifically, what they are, how they are determined, and what they mean for an individual and an economy.
11. How to Find Simple Interest Rate: Definition, Formula & Examples
When we borrow a certain sum of money over a period of time, we agree that we will pay it back, along with a fee, known as the interest owed. Similarly, when we invest a sum of money in a savings account, the account earns us interest. This lesson will show you how to calculate a certain type of interest called simple interest.
12. What is Compound Interest? - Definition, Formula & Examples
In this lesson, find out what compound interest is and what makes it different from simple interest. Then learn the formula for calculating compound interest. Finally, compare both types of interest with a graph that shows the growth in interest.
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Other chapters within the GACE Economics (538): Practice & Study Guide course
- Basic Economic Concepts & Terms
- Scarcity, Choice & The Production Possibilities Curve
- Comparative & Absolute Advantage, Specialization & Trade
- Supply, Demand & Market Equilibrium
- Determining Price in Economics
- Government Issues in Economics
- Business Organization & Decision Making
- Producers & Production in Microeconomics
- Understanding Macroeconomic Equilibrium
- Scarce Economic Resource Markets Basics
- Economic Market Structures
- Basics of Measuring the Economy
- Understanding Economic Growth and Productivity
- Inflation & Adjustment in Economics
- Unemployment Basics
- Understanding Inflation & Unemployment
- Overview of Aggregate Demand & Supply
- Fiscal Policy & Monetary Policy
- Expansionary & Contractionary Gaps
- Money & the Market
- The Central Bank & Monetary Policy
- Foreign Exchange & Trade Balance
- Overview of Inflows, Outflows & Restrictions
- Personal Finance: Consumer Decision Making
- GACE Economics Flashcards