module 13 Flashcards
The ____ for money is a function of economic forces
Demand
The ____ of money is largely a function of the federal reserve as it regulates the money supply.
Supply
Federal reserve regulates the supply of money
Capital market involves
long-term and intermediate-term money instruments
The capital market is divided into two types of capital
debt and equity
Capital instruments may include
Stocks
Bonds
Mortgages
REITs
Deeds of trust/land contracts
Short-term money instruments that comprise the money market can include
Notes
Funds
Eurodollars
CDs
Treasury notes Commercial notes Municipal notes CD's Federal funds Eurodollars
The interaction of buyers and sellers who trade short-term money instruments is referred to as a
money market
Bonds, stocks, and mortgages are _______ instruments
capital
The ______ implements the fiscal policy of the United States.
(TI). Treasury implements
U.S. Treasury
The ______carries out the nation’s monetary policy
RC (reserve Carries)out
Federal reserve
_______ are compensated by dividends (cash flow) and the potential appreciation in the value of their investment.
Equity investors
______ participate in bonds and mortgages and receive fixed or variable interest on their investment through repayment of the principal upon maturity.
Debt investors
Types of mortgages
Guaranteed Mortgage Inured mortgage Conventional mortgage Energy-efficient mortgage (EEM( - may be conventional, FHA, or VA Balloon mortgage
The federal reserve is comprised of ____ regional banks and a number of member banks.
12
What does the federal reserve regulate?
Reserve requirements (if the fed wants to restrict the money supply, it increases the percent of reserves that member banks must maintain, and vice verca.
b. Federal discount rate
(the rate charged by the Fed for funds borrowed by member banks.
c. Federal open Market Committee
(members responsible for setting interest rates and credit policies of the federal reserve system.
An erosion of the purchasing power of currency characterized by price escalation and an increase in the volume of money
inflation
_____ is an increase in the price or value of a property or commodity resulting from an excess of demand over supply
appreciation
_____ is a stated or contract rate.
nominal interest rate
A _____ rate is a nominal interest rate that has been adjusted for expected inflation.
real interest
What are the two sources of capital for real estate?
Money market
Capital Market
(debt & equity investors)
The equity investor is usually more aggressive and willing to take risks, so the funds used for equity investments are called
venture capital
The interaction of buyers and sellers who trade short-term money instruments is referred to as a
money market
Bonds, stocks, and mortgages are ____ instruments
capital
An FHA loan is an example of ______mortgage
insured
