Terms 165-178

Question 1

Bullish

Answer 1

Belief that prices will increase

Question 2

Bearish

Answer 2

Belief that prices will decrease

Question 3

Risk Free Rate of Return

Answer 3

Interest rate of a risk free security, such as 3 month Treasury Bill

Question 4

Junk Bonds

Answer 4

High-yield, speculative bonds that have a high risk of possible default

Question 5

Interest Rate Risk

Answer 5

Risk of changing interest rates, thereby affecting security prices

Question 6

Fiscal Policy

Answer 6

Government policy on taxation of individuals and the investments they make

Question 7

Monetary Policy

Answer 7

Government’s control of the money supply

Question 8

Credit Risk

Answer 8

Risk Creditor that interest and principal will be repaid to the lien holder

Question 9

T-Bills

Answer 9

Short term government debt with maturities of 13, 26, or 52 weeks; issued each monday in increments of $1000, sold at discount; mature to par

Question 10

T-notes

Answer 10

1 to 10 year maturity issued by the US government in increments of $1000

Question 11

T-bonds

Answer 11

Long-terms bonds offered by the US government with maturity of 10 to 30 years

Question 12

32nds

Answer 12

Quote of government securities; 16/32 represents 1/2 of point or $5 on the value of a government issue with 1 point representing $10 (so points is $1000)

Question 13

Monetary Policy

Answer 13

Government’s control of the money supply