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10 Cards in this Set
- Front
- Back
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MONEY
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1. An asset that is generally accepted as payment for goods and services or repayment of debt.
2. Money acts as a unit of account and a store of value. |
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RISK
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1. A measure of uncertainty about the future payoff to an investment, measured over some time horizon and relative to a benchmark.
2. Risk requires compensation. |
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TIME
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1. A measurable period during which something can happen
2. Time has value. |
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STABILITY
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1. Steady and lacking in variation.
2. Stability improves welfare. |
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FINANCIAL SYSTEM
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1. The system that allows people to engage in economic transactions.
2. The financial system has five parts, each of which plays a fundamental role in our economy. |
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FINANCIAL INSTITUTION
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1. Firms, such as banks and insurance companies that provide access to the financial markets, both to savers who wish to purchase financial instruments directly and to borrowers who want to issue them.
2. I am a member of a financial institution. |
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FINANCIAL INSTRUMENT
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1. The written legal obligation of one party to transfer something of value (usually money) to another party at some future date, under certain conditions.
2. Stocks, mortgages, and insurance policies are examples of financial instruments. |
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FINANCIAL MARKET
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1. The part of the financial system that allows people to buy and sell financial instruments quickly and cheaply.
2. The largest centralized exchange in the financial market is the New York Stock Exchange (NYSE). |
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CENTRAL BANK
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1. The financial institution that manages the government's finances, controls the availability of money and credit in the economy, and serves as the bank to commercial banks.
2. Central banks monitor and stabilize the economy. |
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FEDERAL RESERVE SYSTEM
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1. The central bank responsible for monetary policy in the United States.
2. The Federal Reserve System is one of the most important central banks in the world. |
