ch.11 econ

Question 1

annual rate a bondholder will earn if a bond us held to maturity

Answer 1

corporate bond

Question 2

bond sold by a state or local government

Answer 2

municipal bond

Question 3

bond sold in small amounts by the U.S. government

Answer 3

savings bond

Question 4

time when bond must be paid off

Answer 4

maturity

Question 5

amount to be paid to bond holder at maturity

Answer 5

par value

Question 6

a portion of stock

Answer 6

share

Question 7

contract that gives an investor the right to buy or sell a stock

Answer 7

option

Question 8

making high-risk investments with borrowed money

Answer 8

speculation

Question 9

difference between a stocks higher selling price and a lower buying price

Answer 9

capital gains

Question 10

business that specializes in trading stocks

Answer 10

brokerage firm

Question 11

period during which the stock marker falls

Answer 11

bear market

Question 12

money investors get for the use of their money

Answer 12

return

Question 13

collection of financial assets

Answer 13

portfolio

Question 14

lowering risk by making different kinds of investments

Answer 14

diversification

Question 15

helps direct money from savers to borrowers

Answer 15

financial intermediary

Question 16

allows money to go back and forth between savers and borrowers

Answer 16

financial system

Question 17

something bought to make money

Answer 17

investment