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Chapter 11 Vocabulary
N/A
30
Economics
10th Grade
05/05/2011

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Cards

Term
savings
Definition
income not used for consumption
Term
investment
Definition
the use of income today that allows for a future benefit
Term
financial system
Definition
all the institutions that help transfer funds between savers and investors
Term
financial asset
Definition
a claim on the property of the borrower
Term
financial market
Definition
where buyers and sellers exchange financial assets
Term
financial intermediary
Definition
an institution that collects funds from savers and invests the funds in financial assets
Term
mutual fund
Definition
an investment company that gathers money from individual investors and purchases a range of financial assets
Term
capital market
Definition
where long-term financial assets are bought and sold
Term
money market
Definition
where short-term financial assets are bought and sold
Term
primary market
Definition
for buying financial assets directly from the issuer
Term
secondary market
Definition
where financial assets are resold
Term
investment objective
Definition
a financial goal used to determine if an investment is appropriate
Term
risk
Definition
the possibility for loss on an investment
Term
return
Definition
profit or loss on an investment
Term
diversification
Definition
practice of distributing investments among different financial assets
Term
stock exchange
Definition
a market where securities are bought and sold
Term
capital gain
Definition
profit made from the sale of securities
Term
common stock
Definition
gives shareholders voting rights and a share of profits
Term
preferred stock
Definition
gives shareholders a share of profits but, in general, no voting rights
Term
stockbroker
Definition
buys and sells securities for customers
Term
future
Definition
a contract to buy or sell stock on a specific future date at a preset price
Term
option
Definition
gives an investor the right to buy or sell stock at a future date at a preset price
Term
stock index
Definition
measures and reports the change in prices of a set of stocks
Term
bull market
Definition
occurs when stock market prices rise steadily overtime
Term
bear market
Definition
occurs when stock market prices decline steadily overtime
Term
par value
Definition
the amount a bond issuer must pay the buyer at maturity
Term
maturity
Definition
the date when a bond is due to be repaid
Term
coupon rate
Definition
the interest rate a bondholder receives every year until maturity
Term
yield
Definition
the annual rate of return on a bond
Term
junk bonds
Definition
are high-risk, high-yield corporate bonds
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