MBF lecture 1

Question 1

Security

Answer 1

Claim on the issuers future income or assets

Question 2

Bond

Answer 2

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

Question 3

Interest Rate

Answer 3

cost of borrowing or the price paid for the rental of funds

Question 4

Asset

Answer 4

something of value that is owned

Question 5

Liability

Answer 5

something of value that is owed

Question 6

money

Answer 6

anything that is generally accepted as a payment for goods or services

Question 7

price level

Answer 7

average price of goods and services in the economy

Question 8

monetary policy

Answer 8

management of interest rates, exchange rates and the money supply to influence aggregate demand

Question 9

fiscal policy

Answer 9

management of taxation and government spending to influence aggregate demand

Question 10

budget deficit

Answer 10

revenues<expenditure

Question 11

budget surplus

Answer 11

revenues>expenditure

Question 12

Brokers

Answer 12

agents of investors matching buyers with sellers of securities

Question 13

Dealers

Answer 13

link buyers and sellers by buying/selling securities at stated prices

Question 14

Financial markets

Answer 14

markets in which funds are transferred from people and firms who have an excess of funds to people in need of funds