Term
| What is fiat money? What is an example? |
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Definition
| money by government decree; tiny metallic coins |
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Term
| What is commodity money? example? |
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Definition
| money that has an alternative use as an economic good, or commodity; an example would be compressed tea leaves that could be used to make tea when not needed for trade |
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Term
| What are municipal bonds? Why are they good? What are they used for? |
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Definition
| bonds issued by the state and local governments; they are very stable and federally tax dedcutible; they are used for building stadiums, etc. |
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Term
| What are two rating agencies? |
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Definition
| Moody's and Standard &Poors |
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Term
| What are financial intermediaries? examples? |
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Definition
| the institutions that lend the funds that savers provide. Some examples would be banks, credit unions, life insurance companies, pension funds |
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Term
| What is a mutual fund? What are some examples? |
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Definition
| a company that sells stock in itself and uses the proceeds to buy stocks and bonds issued by other companies; |
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Term
| What is a corporate bond? What would be an example? |
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Definition
| a bond that a corporation issues to raise money effectively and expand its business |
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Term
| What is interest rate risk? |
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Definition
| the risk associated with the possibility than an investment made may be inferior in the future |
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Term
| What is the yield? it is the same as a _____. |
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Definition
| bond's annual coupon interest divided by purchase price; measure of a bonds return; same as the dividend |
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Term
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Definition
| a broker who buys and sells securities on a stock exchange on behalf of clients |
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Term
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Definition
| new york stock exchange; it is a bull market; the Dow Jones Industrial Association association is the index for the nyse |
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Term
| What is the Dow Jones Industrial Average? |
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Definition
| a measure of stock market performance based on 30 representative stocks; it is the most popular measure of stock marekt performance |
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Term
| What is an over the counter market? |
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Definition
| electronic marketplace for securities not listed on organized exchanges such as the NYSE |
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Term
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Definition
| the most important over the counter market; stands for National Association of Securities Dealers Automated Quotation; it is the world's largest electronic stock market |
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Term
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Definition
| the availability of liquid assets to a market or company |
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Term
| What is the efficient market hypothesis? |
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Definition
| argument that stocks are always priced about right because they are closely watched |
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Term
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Definition
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Term
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Definition
| a contract to buy stock at a specified time in the future |
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Term
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Definition
| futures contract wher you can make someone buy from you in the future |
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Term
| what is a bull market? example? |
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Definition
| stong market; new york stock exchange |
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Term
| What is a bear market? example? |
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Definition
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Term
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Definition
| the risk of not being able to meet financial obligations when they come due |
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Term
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Definition
| a US government bond with a maturity of 10 to 30 years |
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Term
| What are the three main characteristics of money? |
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Definition
| medium of exchange, measure of value, store of value |
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Term
| What is the risk assoaciated with losing your initial investment or your principal amount? |
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Definition
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Term
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Definition
| individual retirement account |
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Term
| What is it called when the corporation doubles the number of shares but cuts the price? |
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Definition
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Term
| What is the name of a bond where you pay fifty dollars for it but you get a lot more back? |
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Definition
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Term
| What is the efficient market hypothesis? |
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Definition
| it is impossible to time the market |
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Term
| What is the first move you make in selling a stock? |
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Definition
| sell at high prices, buy at low prices |
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Term
| A fund set up to collect income and diburse payments to those persons eligible for retirement is the definition of a ____. |
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Definition
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Term
| A long term, tax sheltered time deposit that an employee can set up to draw on in the future for retirement is called a____. |
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Definition
| IRA-individual retirement account |
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Term
| the profits of a company: |
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Definition
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Term
| typical number of shares traded on a typical day: |
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Definition
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Term
| rough estimate of how expensive the stock is verses its earnings |
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Definition
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Term
| Number of shares traded that day: |
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Definition
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Term
| the high and low stock price over the year: |
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Definition
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Term
| the estimated stock price one year from now: |
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Definition
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Term
| all of the outstanding shares times the stock price: |
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Definition
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Term
| profits paid out to shareholders: |
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Definition
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Term
| the total profits of the company divided by the total shares outstanding: |
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Definition
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Term
| An investor views a corporate bond as a financial asset generating a fututre payment stream for the life of the bond |
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Definition
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Term
| If a bond is traded at a discount then what must have happened? |
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Definition
| interest rates on similar investments have risen |
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Term
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Definition
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Term
| principal amount initially borrowed: |
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Definition
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Term
| coupon divided by par value: |
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Definition
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Term
| return, in dollars, due to the owner of the bond |
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
| What are the three parts of the financial system? |
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Definition
| funds, financial assets, organizations |
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