Chapter 17- Financial Markets

Question 1

Bond yield

Answer 1

The rate of return a bond is expected to pay at the time of purchase

Question 2

Bond holder

Answer 2

Someone who owns bonds and receives the interest payments

Question 3

Capital gains

Answer 3

A financial gain from buying an asset like a share of stock of a house, and later selling it at a higher price

Question 4

CD

Answer 4

A mechanism for a saver to deposit funds at a bank and promise to leave them at the bank for a time, in exchange for for a higher rate of interest
Certificate of deposit

Question 5

Diversification

Answer 5

Investing in a wide range of companies to reduce the level of risk

Question 6

What factors affect product design

Answer 6

Self actualization 
Esteem 
Love 
Safety 
Physiological

Question 7

What are consumers looking for?

Answer 7

Health
Convenience
Indulgence
Social

Question 8

Actual rate of return

Answer 8

The total rate of return including capital gains and interest paid on investment at the end of a period of time

Question 9

What is the difference between systematic and non-systematic risk?

Answer 9

Systematic- refers to investing in a company, non systematic is the industry market as a whole