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vocabulary
1000+ books

100 Words Encountered in

Personal Finance

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economics
She's likable, but I won't vote for her because of her leanings in economics.†
economics = the study of how limited resources are allocated in an attempt to satisfy unlimited wants
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Library4 uses in 10 avg bks
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capital
She worked hard to raise capital to start their new company.
capital = cash (or more generally, material wealth — especially assets available for use in the production of further assets)
DefinitionGenerally this sense of capital means:
material wealth — especially assets available for use in the production of further assets
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Library2 uses in 10 avg bks
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portfolio
as in:
a leather portfolio
The papers are in my portfolio.
portfolio = a large, flat, thin case for carrying papers, drawings, etc.
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appreciate
as in:
We hope our home will appreciate
The home appreciated in value.
appreciated = increased in value
DefinitionGenerally this sense of appreciate means:
to increase in value
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assess
2 meanings
as in:
assess the situation
They assessed the property's value at $500,000.
assessed = considered and judged
DefinitionGenerally this sense of assess means:
consider something and make a judgment
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as in:
assess a fee
The amount of property tax assessed depends upon the value of the property.
assessed = charge a tax, fine, or fee
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mortgage
We are the proud owners of a new home and a $100,000 mortgage.
mortgage = a real estate loan agreement that promises to turn the real estate over to the lender if the loan isn't paid
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Library4 uses in 10 avg bks
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acquire
Children acquire language at an amazing rate.
acquire = obtain (come into the possession of something)
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Library17 uses in 10 avg bks
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contract
as in:
legal contract
She signed the contract.
contract = a written agreement that is enforceable by law
DefinitionGenerally this sense of contract means:
an agreement - typically written and enforceable by law
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Library10 uses in 10 avg bks
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anxiety
She suffers from more than the usual pre-test anxiety.
anxiety = nervousness or worry
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Library22 uses in 10 avg bks
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dividend
as in:
dividend paid by stock
She buys high-dividend stocks.†
dividend = that part of the earnings of a corporation that is distributed to its shareholders
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speculate
philosophers have speculated on the question of God for thousands of years
speculated = thought and guessed without certainty
DefinitionGenerally this sense of speculate means:
to guess without certainty

or:

to think about or consider something

or (more rarely):

to risk money in a financial venture
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speculative
I'm too old to invest in speculative business enterprises.
speculative = uncertain — especially in reference to a profit-making investment or venture
DefinitionGenerally this sense of speculative means:
uncertain — especially in reference to a profit-making investment or venture

or:

inclined to guess and think about subjects where there is no certainty
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sufficient
We have sufficient supplies.
sufficient = adequate (enough — often without being more than is needed)
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Return on Investment (ROI)
We anticipate a 12% ROI.†
ROI = finance:  a measure of the value of an investment generally expressed as an annual percentage of the money invested; calculated as the amount of money earned divided by the amount of money invested
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obligation
She feels that helping him is her obligation.
obligation = duty
DefinitionGenerally obligation means:
a duty
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allocate
allocate time and resources†
allocate = distribute according to a plan; or set apart for a special purpose
DefinitionGenerally allocate means:
distribute according to a plan

or:

set apart for a special purpose
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annuity
The annuity does not increase with inflation.†
annuity = income received in regular periodic payments — especially from a fixed capital investment
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inflation
The report shows inflation-adjusted dollars.†
inflation = a general and progressive increase in prices
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indicate
These maps are drawn with north to the top unless otherwise indicated.
indicated = pointed out (shown)
DefinitionGenerally indicate means:
to show (point out, demonstrate, express, or suggest)
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Library38 uses in 10 avg bks
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ratio
There is much interesting study on the predictive value of the ratio of the length of the index finger to the ring finger within a given gender and race.
ratio = relative lengths
DefinitionGenerally ratio means:
the relative magnitudes of two quantities — often expressed as a:b (which could also be expressed as the fraction a/b)
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net worth
The net worth on her financial statement does not reflect her youthful promise.†
net worth = financial worth as calculated by subtracting liabilities from assets
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equity
They bought the house without a 3% down payment, but now have negative equity.†
equity = the value of an asset after all debts upon it are paid
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assets
as in:
it's one of her best assets
The University is one of the city's greatest assets.
assets = things of value
DefinitionGenerally this sense of assets means:
a positive trait or thing of value
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liabilities
as in:
she is a liability to our cause
Her temper is her main liability. She hasn't learned to control angry attacks at anyone who disagrees with her.
liability = any negative trait or thing that creates a problem
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approximate
The state has approximately as many Republicans as Democrats.
approximately = about (but not exactly)
DefinitionGenerally approximate means:
almost, but not exact; or similar
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default
as in:
defaulted on their loan
If I don't sell my home, I'll have to default on my loan.
default = not make the payments
DefinitionGenerally this sense of default means:
failing to meet a financial obligation—such as making a monthly payment on a debt
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stock
She bought Google stock before it doubled in value.
stock = shares of ownership of different corporations
DefinitionGenerally this sense of stock means:
shares of ownership of a corporation
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bond
as in:
the bond market
US Bonds are considered vary safe, but they will go down in value when interest rates rise.
bonds = certificates to repay a loan that are issued by a government or corporation
DefinitionGenerally this sense of bond means:
a certificate issued by a government or corporation that promises to repay a debt  in return for a loan
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Library3 uses in 10 avg bks
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capital gain
Congress is voting on whether to increase the rate of the capital gains tax.†
capital gains = the amount by which the selling price of an asset exceeds the purchase price
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Individual Retirement Account (IRA)
The company matches her contributions to her IRA.†
IRA = Individual Retirement Account (a retirement savings account into which the saver can invest money with tax advantages)

(editor's note:  IRA is also used as an abbreviation for Irish Republican Army — a name used by various historical organizations that fought for Irish independence from Great Britain.)
DefinitionGenerally Individual Retirement Account (IRA) means:
a retirement savings account into which the saver can invest money with tax advantages
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reconcile
as in:
reconciled their differences
She reconciled her checking account statement.
reconciled = brought into agreement (in this case, the statement from the bank with the record she kept in her check register)
DefinitionGenerally this sense of reconcile means:
to bring into agreement
The exact meaning of reconcile can depend upon its context. For example:
  • "We reconciled our differences and are on friendly terms now." — settled or found a way to accept
  • "They did break up, but they reconciled since then." — made up
  • "I need to reconcile my goals with my abilities." — make compatible
  • "I need to reconcile my checkbook." — get the checkbook numbers and the bank statement to agree
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diversify
She has been typecast as the female who beats up males, but she's eager to diversify her roles.
diversify = make more varied
DefinitionGenerally diversify means:
to make more varied
Diversify is used to describe variation in some things so frequently that they can be implied by the general context without a need to state them explicitly — such as:
  • with regard to people — varying races, ethnicities, and genders
  • with regard to investments — varying types of investments
  • with regard to a company — varying sources of business
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inquire
Students should contact our office to inquire about scholarship opportunities.
inquire = ask about or look into
DefinitionGenerally inquire means:
to ask about or look into something
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scrutiny
She scrutinized her reflection in the mirror.
scrutinized = looked very carefully at
DefinitionGenerally scrutiny means:
careful examination of something
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comprehensive
Her insurance includes comprehensive coverage.
comprehensive = including everything
DefinitionGenerally comprehensive means:
including everything or everything important
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bankrupt
2 meanings
as in:
company went bankrupt
If we don't control spending, we'll go bankrupt.
bankrupt = legally declared to be unable to pay money that is owed

or (informally):  the state of having little or no money
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as in:
bankrupt idea
It is a bankrupt approach to solving the problem.
bankrupt = without value
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prosperity
We are hoping for peace and prosperity.†
prosperity = the state of doing well — especially economically
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certificate of deposit (CD)
We won't need the money until August, so we put the money in a 3-month certificate of deposit to earn more interest.†
certificate of deposit = money deposited with a financial institution for a stated time for a fixed rate of interest
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habitual
The counseling is to break the cycle of habitual drug abuse.
habitual = done regularly without repeated thought
DefinitionGenerally habitual means:
done regularly
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liable
as in:
is legally liable
She was drunk and liable for the death of the other driver.
liable = held legally responsible
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money market fund
We try to keep the equivalent of six months of expenses in a money market fund.†
money market fund = a mutual fund designed to support frequent deposits and withdrawals and that invests in very short-term instruments such as U.S. Treasury bills, corporate commercial paper and certificates of deposit
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compound interest
The power of compound interest over long periods of time is not intuitive.†
compound interest = interest calculated on both the initial amount and on previous interest earned;

Example:  $100 invested at 10% interest would earn $10 per year, but if interest is compounded annually, it would earn $11 the second year
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down payment
We're saving money for a down payment on a home.
down payment = a partial payment made at the time of purchase
DefinitionGenerally down payment means:
a partial payment made at the time of purchase (the rest to be paid later)
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Dow Jones Industrial Average
The Dow is up for the year, but dropped over a 100 points today.†
The Dow = most commonly followed index of the U.S. stock market comprised of 30 stocks that are thought to be a barometer of U.S. stocks in general
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S&P 500 Index
The company is being dropped from the S&P 500.†
S&P 500 = an index of 500 U.S. stocks that is one of the top 3 indexes watched as a benchmark of U.S. stock performance
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mutual fund
I invest in a low-cost, diversified mutual fund.†
mutual fund = fund enabling investors to pool their money and place it under professional investment management
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index fund
A large index fund tends to have lower costs.†
index fund = a mutual fund that matches its portfolio to a specific financial market index, with the intent of duplicating the performance of the market index
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exchange-traded fund
I won't invest in any exchange-traded fund that isn't large, liquid, and easy to understand.†
exchange-traded fund = mutual funds that trade like stocks
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common stock
When people talk about investing in the stock market, they are almost always talking about common stocks.†
common stocks = a share of the corporation's profits and a share of the voting power in shareholder elections
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bear market
The bear market will reduce capital gains tax revenue.†
bear market = a stock market characterized by falling prices
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bull market
It's easy to look like a smart investor in a bull market.†
bull market = a stock market characterized by rising prices
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arbitration
They submitted their disagreement to binding arbitration.
arbitration = the hearing and determination of a dispute by an impartial referee
DefinitionGenerally arbitration means:
the process of solving an argument with the help of an impartial referee
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optimal
It is the optimal solution.†
optimal = most desirable possible — often given the circumstances
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broker
I've learned to buy mutual funds online without a broker.†
broker = someone who negotiates or facilitates agreements between other parties (such as a real estate or stock broker)
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brokerage
We sell software used by real estate brokerages.†
brokerages = a firm where brokers work
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susceptible
susceptible to colds†
susceptible = easily influenced, harmed, or impressed emotionally
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methodology
a proven research methodology
methodology = a system of principles and procedures for doing or studying something
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price/earnings ratio (P/E)
The problem with the price/earnings ratio is that earnings fall so fast in a recession.†
price/earnings ratio = the price of a stock divided by earnings per share; for example, if the share price is $150 and company earnings are $10 per share, then the P/E ratio is 15
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term life insurance
We're comparing term life insurance policies.†
term life insurance = life insurance coverage for a specific period of time
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whole life insurance
The sales agent convinced us we should buy whole life insurance even though it cost more.†
whole life insurance = insurance on the life of the insured for a fixed amount at a definite premium that is paid each year in the same amount during the remaining lifetime of the insured — typically there is also a savings plan attached (with some tax shelter)
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community property
California and Texas are two of the community property states.
community property = property and income belonging jointly to a married couple

or:

the principle that property acquired during a marriage and funds that are commingled during the marriage are jointly owned
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credit bureau
By law, you can request a free credit report on you from any of the credit bureaus.†
credit bureaus = a private firm that maintains consumer credit data files and provides credit information to authorized users for a fee
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overdraft
My checking account has overdraft protection.†
overdraft = withdrawing (or attempting to withdraw) more money out of an account than is available in it
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no-load fund
It's a no-load fund, but it has high annual fees.†
no-load fund = a mutual fund that does not charge a "sales commission" for buying or selling its shares
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fixed rate loan
We knew we wouldn't move, so we paid a little extra to get a fixed rate loan.†
fixed rate loan = a loan in which the interest rate remains the same for the entire term of the loan
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adjustable rate loan
We got an adjustable rate loan because it was cheaper and we thought our income would be much higher later.†
adjustable rate loan = a loan in which the interest rate may vary over the term of the loan
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intestate
She died intestate.
intestate = without a will
DefinitionGenerally intestate means:
describes a person who died without a legally valid will; or describes property left by such a person
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derive
She likes to win, but she doesn't derive pleasure from watching others lose.
derive = get
DefinitionGenerally derive means:
to get something from something else

(If the context doesn't otherwise indicate where something came from, it is generally from reasoning—especially deductive reasoning.)
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sales commission
We aim to have our sales people earn 20% of their salary in sales commissions.†
sales commissions = any percentage of a sale price that a salesperson is paid for facilitating the sale
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prime rate
Our line of credit is at the prime rate + 1 percent.†
prime rate = the short-term interest rate announced by leading banks to charge their best customers
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fringe benefit
I earn about the same as at my last job, but the fringe benefits are great.†
fringe benefits = an indirect, non-cash benefit provided to employees by employers in addition to regular wage or salary compensation, such as health insurance
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stock split
The share price is down since I bought, but the stock split, so my investment is actually worth more money.†
stock split = an increase in the number of outstanding shares of a corporation without changing the percentage of the company owned by each shareholder
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standard deduction
The standard deduction is increased for those who are old or blind.†
standard deduction = For U.S. income tax, a base amount of income not subject to tax for taxpayers who do not itemize deductions.
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disposable income
Disposable incomes have barely kept pace with inflation.†
disposable incomes = income (after taxes)

or (less commonly and arguably better referred to as discretionary income): income not required for reasonable and necessary living expenses
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title insurance
I found a less expensive title insurance company than the one recommended by my realtor.†
title insurance = insurance protecting the homeowner and lenders against loss resulting from presumed sale of real estate that the seller was not free to sell
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free and clear
My grandmother own their home free and clear.†
free and clear = ownership of property where it is free from all debts
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present value
What is a fair market calculation of the present value of the lottery payments if I don't take the lump sum?†
present value = finance:  the current value of one or more payments to be received or paid in the future
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net present value
If I keep the rental occupied and there are no unexpected expenses, what is the net present value of the investment?†
net present value = the difference between the present value of the cash inflows and the present value of the cash outflows associated with an investment
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liquid asset
Their balance sheet shows a precipitous plunge in liquid assets.†
liquid assets = cash or an asset (something of value) that is easily converted into cash
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reverse mortgage
My grandmother got a reverse mortgage so she wouldn't have move from her home.†
reverse mortgage = a type of loan used by older homeowners as a way of converting the net value of their home into a cash payment (or series of payments) while retaining ownership of their property
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debt service
The interest rate re-set and now the debt service is too high.†
debt service = the amount of a periodic loan payment (including interest and principal)
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codicil
She challenged the codicil.†
codicil = an instruction added to a will
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limit order
The market was climbing so fast that my limit order purchase was never executed.†
limit order = an order to a broker to buy a certain stock (or other financial instrument) only if its price is no more than a specified level or to sell a only if the price is no less than a specified level
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garnish wages
The IRS can and does garnish wages for unpaid taxes.†
garnish wages = having a percentage of someone's wages paid to a third party who is owed money by the employee due to a court judgment
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rule of 72
The rule of 72 is useful for in-the-head approximations.†
rule of 72 = finance:  method of estimating the time required to double an investment; 72 divided by the annual return percentage

For example:  If an investment returns 12%, the invested funds will have doubled in 6 years (72 divided by 12 equals 6).
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homestead exemption
Texas and Florida are amongst the states that have a homestead exemption.†
homestead exemption = an amount of the value of one's home that some states and local jurisdictions deduct from the value subject to property tax
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con artist
He was swindled by a con artist.†
con artist = someone who tricks another for financial gain
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counter offer
How long is the counteroffer binding?†
counteroffer = the rejection of an offer to buy or sell that simultaneously makes a different offer
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bounced check
I thought I had more money in my account and my check bounced.†
check bounced = a check that a bank has refused to cash or pay because the account holder does not have sufficient funds to cover it in their account
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installment plan
We're paying tuition for the college on their installment plan.†
installment plan = a method of buying personal property on credit and making payments at regular intervals for a specific term
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earnest money
We included $10,000 earnest money with our offer, so they would know we are serious.†
earnest money = a small initial deposit attached to an offer to purchase real estate
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deposit slip
I still have checks, but I ran out of deposit slips.
deposit slips = a slip of paper made to lists the amount of money and each check being deposited into a bank account
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disclaim
we disclaim any responsibility for the accident†
disclaim = to deny:  responsibility for, knowledge of, or ownership of
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FDIC insurance
The bank is covered by FDIC insurance.†
FDIC insurance = a government corporation that insures the first $100,000 of each account in banks that are members of the Federal Reserve System
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overhead
We're trying to reduce overhead in case John is laid off.†
reduce overhead = for a business:  recurring costs that are not direct inputs into generating income

or:

for a household:  all recurring costs (such as rent, utilities, car payments, groceries, etc.)
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pyramid scheme
Pyramid schemes are illegal in the United States.†
pyramid schemes = a fraudulent scheme in which people are recruited to make payments to the person who recruited them while expecting to receive payments from the persons they recruit; when the number of new recruits fails to sustain the hierarchical payment structure the scheme collapses with most of the participants losing the money they put in
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Kelley Blue Book
According to the Kelley Blue Book, my car is worth less than I owe on it.†
Kelley Blue Book = Most commonly refers to a used car's estimated value, but can also reference the company called "Kelly Blue Book" or the book they publish of estimated car values.
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financial derivative
I avoid investing in financial derivatives I don't understand.†
financial derivatives = a tradable financial product whose value depends on something else — usually the value of a commodity or a rate (such as interest, or currency rate), but it could be anything; e.g., the weather

often shortened to "derivative"; though that word can have different meanings depending upon the context
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† 
Sample usage followed by this mark was not checked by an editor. Please let us know if you spot a problem.
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