Chapter 11 Flashcards Preview

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Flashcards in Chapter 11 Deck (20):
1

economic investment

money lent to a business

2

personal investment

individuals putting savings into financial assets

3

financial market

where buyers and sellers exchange assets directly

4

financial intermediary

collects funds from savers, invests in financial assets

5

capital market

for buying and selling long-term financial assets

6

money market

for buying and selling short-term financial assets

7

primary market

for financial assets that original buyer must redeem

8

secondary market

where financial assets are resold

9

stock exchange

secondary market where securities resold and bought

10

capital gains

profit made from sale of stock

11

common stock

gives shareholders voting rights and share of profits

12

preferred stock

gives shareholders share of profits but no voting rights

13

future

contract to buy and sell on specific future date a present price

14

option

contract giving right to buy and sell in future at present price

15

bull market

prices rise steadily over a relatively long period

16

bear market

prices decline steadily over a relatively long period

17

par value

amount issuer must pay buyer at maturity

18

maturity

date when bond is due to be repaid

19

coupon rate

interest rate bondholder get every year until maturity

20

yield

annual rate of return on a bond