Intro to Business

• Older People & Long Term -> Bonds & Stocks
• If a business is owned by shareholders, it is a corporation.
• A sole proprietorship is a business owned by one individual.
• A non-profit organization is a legal entity whose goals do not gain or profit for its members, with the purpose to improve quality of life.
• A partnership is a business agreement between two or more individuals to jointly manage a business.
• Ethics are the standard for morally right and wrong conducts.
• The marketing department of a business coordinates and produces all materials representing the business, and is in charge of reaching the customer.
• The human resource department of a business is tasked with dealing with people
• A niche market is a smaller segment of a larger market whose needs are not met by the main providers.
• The two fundamental roles of marketing are to sell what a business makes and manage a business’s brands.
• A fad is a product with a short lifecycle that rises quickly in popularity but dies as quickly as well.
• The 4P’s of marketing are Product, Place, Promotion, and Price.
• Demographics in marketing are statistics that describe the characteristics of a population (age or income).
• Consumer wants are things that people desire but can live without.
• Needs are things that people need to survive.
• The law of demand states that when prices are high, demand is high, and when prices are low, demand is low, creating a negative relationship.
• The law of supply states that when prices are high, supply is low, and when prices are low, supply is high, creating a positive relationship.
• If demand for a good is high and supply is low, the price of a good will go up as it is more valuable.
• An economic system is when societies or governments organize and distribute available products and services across a region or country.
• Free Market Economy is an economic system in which economic decisions and pricing of products are determined by interactions of individuals and businesses, with limited government intervention.
• Planned/Command Economy is an economic system in which economic decisions are made by a central authority (government) rather than the market participants.
• Mixed Economy is an economic system in which private property is protected and a level of economic freedom is allowed while allowing the government to interfere in economic activities.
• Opportunity cost is the loss of potential gain from one alternative when another alternative is chosen.
• A corporate bond is an investor loaning money to a company and in return, the investor gets interest income.
• Bonds must be issued by large corporations such as Apple, Netflix, Bank of Montreal, etc.
• Stocks are considered the most risky investment as their value can fluctuate.
• Diversification is the process of buying different types of investments to spread out risk.
• Compound Interest is when you earn or pay interest on interest, the interest builds up every year.
• A TFSA - Tax Free Savings Account is when a person puts money in a savings account for a long period of time with no tax deduction, it grows tax free.
• A GIC - Guaranteed Investment Certificate is an investment that offers a guaranteed rate of return over a fixed period of time, most commonly issued by trust companies or banks.
• A Mortgage is a loan used to buy or maintain a piece of real estate (land, house, etc.), a creditor loans money with interest and gains the title of owner until the borrower repays the loan, the loan is repaid over a specific number of years with interest.
• Revenue minus Expenses equals Net Income.
• Accounting is to record and report financial business for a company.
• Common Stocks are part ownership of a publicly traded corporation and portions are called stocks or shares.
• Revenue - Sales, Inventory
• A 12 month period chosen by a company to report its financial information is known as a fiscal year in accounting.
• The risk level in a mutual fund is based on its investment focus.
• A mutual fund is an investment that can include hundreds of different stocks, bonds, etc.
• A product life cycle includes Introduction, Growth, Maturity, Decline stages.
• GICs are safe investments as they guarantee a return.