Chp 11 Questions Flashcards
How individuals save
Savings account, bonds, cd
What makes economic growth possible?
Saving
Three parts of a financial system
Funds a saver transfers to a borrower
Financial assets that certify conditions of a loan
Organizations that bring the surplus funds and financial assets together
What are the largest sectors of borrowers in the US
Governments and businesses
What are the biggest sources of funds in the US
House holds and businesses
Non bank financial intermediaries
Finance company
Life insurance company
Pension funds
Things you might consider before investing your money
Consistent
Simple
Risk return relationships
Investment objectives
Three main components of a bond
Coupon rate
Maturity
Par value
To compare bonds, investors compute the bonds?
Current yield
What are bonds rated on
Financial health
Ability to make principle payments
Credit history
Choices investors have to invest their money today
CDs Corporate bonds Municipal bonds Gov savings bonds Treasury notes Treasury bills Treasury bonds Ira
Market for financial assets
Capital
Money
Primary
Secondary
Ways to purchase equities
Broker
Internet
Mutual funds
401k plan
The value of stocks depends on these things
Shares to be traded
Company’s profitability
Expectations of growth
Oldest stock exchange
New York stock exchange
