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35 Cards in this Set
- Front
- Back
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financial system
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the system that allows the transfer of money between savers and borrowers.
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savers, financial intermediates, and borrowers are 3 types of ______
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components
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Financial Intermediary
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institution that helps channel funds from savers to borrowers.
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Financial Asset
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claim on income
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Investments
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the use of assets to earn income or profit.
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non traditional investment
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college, home/house put money in, get money out.
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Diversification
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spreading out investments to reduce risk
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portfolio
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a collection of financial assets
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example of a portfolio is a _______
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consumer
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prospectus
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an investment report to potential investors
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prospectus is only for ______
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producers
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return
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the money an investor receives above and beyond the sum of money initially invested
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bonds
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basically loans that represent debt that the gov't or a corporation must repay to an investor have 3 basic components
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face value
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the amount that an investor pays to purchase a bond and that will be repaid to the investor at maturity
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face value can be known as
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par value, principal
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Coupon Rate
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the interest rate that a bond issuer will pay to a bondholder
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maturity
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the time at which payment to a bond holder is due
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certificates of deposit
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one of the most common forms of investments, and available for banks and fixed amounts of time
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SEC
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gov't agency that regulates financial markets and interest companies
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mutual fund
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collects the savings of many individuals and invest this money in a variety of stocks, bonds, and other financial assets
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example of mutual fund is
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diversification
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share
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portion of stock
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share is also known as
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equity
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initial public offering
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a companies first offering of stock to the public
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dividends
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profits paid to stockholders usually 4 times/yr
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capital gains
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difference between a high selling price and low purchase price.
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capital gains do ____
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buy low, and sell high
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stock split
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the division of a single share of stock into more than one share.
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stock split attracts
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investors
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stock broker
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links buyers and sellers of stock
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brokerage firm
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business that specializes in trading stock.
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another example of brokerage firm is an _____
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investment bank
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stock exchange
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market for buying and selling stock
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NYSE
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largest and most powerful exchange in america
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the day
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shows the stocks have traded
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