Chapter 1 Flashcards
Assets
any financial claim or piece of property that is subject to ownership
Banks
Bonds
is a debt security that promises to make payments periodically for a
specified period of time
Central bank
Common stock
represents a share of ownership in
a corporation. It is a security that is a claim on the earnings and assets of the corporation
E-finance
the ability to deliver financial services electronically
Federal reserve system (FED)
the government agency responsible for the conduct of monetary policy, IN USA
Financial crises
major disruptions in financial markets that are characterized by sharp declines in asset prices
and the failures of many financial and nonfinancial firms.
Financial innovation
the development of new financial products and services,
Financial intermediaries
, 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.
Financial Markets
markets in which funds are
transferred from people who have an excess of available funds to people who have
a shortage.
Foreign exchange market
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).
Interest rate
Monetary policy
involves the management of interest rates and the quantity of
money, also referred to as the money supply
Money (money supply)
(defined as anything that is generally
accepted in payment for goods and services or in the repayment of debt)
