Chap 11 Flashcards
An amount of money you can obtain quickly in case of immediate need
Emergency Fund
A short term loan that is approved before the money is actually needed
Line of Credit
A high-risk investment made in the hope of earning a relatively large profit in a short time
Speculative investment
The ability to buy or sell an investment quickly without substanibility affecting the investments value
Liquidity
The process of spreading your assets among several different types of investments to lessen risk
Asset allocation
The written pledge of a government or a municipality to repay a specified sum of money, along with interest
Government bond
A debt security issued by a state or local government
Municipal bond
A bond backed by the full faith, credit, and unlimited taxing power of the government that issued it.
General obligation bond
A bond that is repaid from the income generated by the project it is designed to finance
Revenue bond
A corporations written pledge to repay a specified amount of money with interest
Corporate bond
The dollar amount the bondholder will receive at the bonds maturity
Face value
For a corporate bond, the date on which the corporation is to repay the borrowed money
Maturity date
A legal document that details all of the conditions relating to a bond issue
Bond indenture
A financially independent firm that acts as the bondholders representative
Trustee
A bond that is backed only by the reputation of the issuing corporation
Debenture
