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Economis > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

Investment

A

Redirecting resources from being consumed today so that they may create benefits in future

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2
Q

Financial system

A

Allows transfer of money between savers and borrowers

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3
Q

Financial asset

A

Claim on the property or income of a borrower

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4
Q

Financial intermediary

A

Institution that helps channel funds from savers to borrowers

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5
Q

Mutual fund

A

Fund that pools savings of many individuals and invests this money in a variety of financial assets

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6
Q

Diversification

A

Spreading out investments to reduce risk

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7
Q

Portfolio

A

Collection of financial assets

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8
Q

Prospectus

A

Investment report to potential investors

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9
Q

Return

A

Money an investor receives above and beyond the sum

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10
Q

Coupon rate

A

Interest rate that a bond issuer will pay to a bond holder

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11
Q

Maturity

A

Time at which payment is due to bondholder

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12
Q

Par value

A

Amount an investor pays to purchase a bond and repaid to investor of maturity

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13
Q

Yield

A

Annual rate of return on a bond if bond were held maturity

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14
Q

Savings bond

A

Low-denomination bond issued by the United States government

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15
Q

Municipal bond

A

Bond issued by state or local government or municipality to finance improvements as highways….etc.

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16
Q

Corporate bond

A

A bond that a corporation issues to raise money to expand its business

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17
Q

Securities and exchange commission

A

Independent agency of the government that regulates financial markets and investment companies

18
Q

Junk bond

A

A lower-rated, potentially higher-paying bond

19
Q

Capital market

A

Money lent for periods longer than a year

20
Q

Money market

A

Money lent for periods of less than a year

21
Q

Primary market

A

Selling financial assets that can only be redeemed by original holder

22
Q

Secondary market

A

Reselling financial assets

23
Q

Share

A

Portion of stock

24
Q

Equities

A

Claims of ownership in a corporation

25
Q

Capital gain

A

Difference between a higher selling price and lower purchase price resulting in financial gain for seller

26
Q

Capital loss

A

Difference between a lower selling price and a higher purchase price resulting in financial loss to a seller

27
Q

Stock split

A

Division of a single share of stock into more than share

28
Q

Stockbroker

A

Person who links buyers and sellers of stock

29
Q

Brokerage firm

A

Business that specializes in trading stocks

30
Q

Stock exchange

A

Armed for buying and selling stock

31
Q

OTC Market

A

Electronic marketplace for stocks and bonds

32
Q

Nasdaq

A

American market for OTC securities

33
Q

Futures

A

Contracts to buy or sell at a specific date in the future at a price specified today

34
Q

Options

A

Contracts that give investors the choice to buy or sell stock and other financial assets

35
Q

Call option

A

Option to buy shares of stock at a specified time in the future

36
Q

Put options

A

Option to sell shares of stock at a specified time in the future

37
Q

Bull market

A

Steady rise in the stock market over a period of time

38
Q

Bear market

A

Steady drop in the stock market over a period of time

39
Q

The Dow

A

Index that shows how certain stocks have traded

40
Q

S & P 500

A

Index that shows the price changes of 500 different stocks

41
Q

Great Crash

A

Collapse of the stock market in 1929

42
Q

Speculation

A

Practice of making high-risk investments with borrowed money in hopes of getting a big return

Economis (15 decks)

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