Chapter 1

Question 1

Assets

Answer 1

any financial claim or piece of property that is subject to ownership

Question 2

Banks

Question 3

Bonds

Answer 3

is a debt security that promises to make payments periodically for a
specified period of time

Question 4

Central bank

Question 5

Common stock

Answer 5

represents a share of ownership in
a corporation. It is a security that is a claim on the earnings and assets of the corporation

Question 6

E-finance

Answer 6

the ability to deliver financial services electronically

Question 7

Federal reserve system (FED)

Answer 7

the government agency responsible for the conduct of monetary policy, IN USA

Question 8

Financial crises

Answer 8

major disruptions in financial markets that are characterized by sharp declines in asset prices
and the failures of many financial and nonfinancial firms.

Question 9

Financial innovation

Answer 9

the development of new financial products and services,

Question 10

Financial intermediaries

Answer 10

, institutions
such as commercial banks, savings and loan associations, mutual savings banks,
credit unions, insurance companies, mutual funds, pension funds, and finance
companies that borrow funds from people who have saved and in turn make loans
to others.

Question 11

Financial Markets

Answer 11

markets in which funds are
transferred from people who have an excess of available funds to people who have
a shortage.

Question 12

Foreign exchange market

Answer 12

For funds to be transferred from one country to another, they have to be converted
from the currency in the country of origin (say, dollars) into the currency of the
country they are going to (say, euros).

Question 13

Interest rate

Question 14

Monetary policy

Answer 14

involves the management of interest rates and the quantity of
money, also referred to as the money supply

Question 15

Money (money supply)

Answer 15

(defined as anything that is generally
accepted in payment for goods and services or in the repayment of debt)