Shared Flashcard Set

Details

Economics Chapter 11
financial markets
51
Economics
12th Grade
10/10/2012

Additional Economics Flashcards

 


 

Cards

Term
What is fiat money? What is an example?
Definition
money by government decree; tiny metallic coins
Term
What is commodity money? example?
Definition
money that has an alternative use as an economic good, or commodity; an example would be compressed tea leaves that could be used to make tea when not needed for trade
Term
What are municipal bonds? Why are they good? What are they used for?
Definition
bonds issued by the state and local governments; they are very stable and federally tax dedcutible; they are used for building stadiums, etc.
Term
What are two rating agencies?
Definition
Moody's and Standard &Poors
Term
What are financial intermediaries? examples?
Definition
the institutions that lend the funds that savers provide. Some examples would be banks, credit unions, life insurance companies, pension funds
Term
What is a mutual fund? What are some examples?
Definition
a company that sells stock in itself and uses the proceeds to buy stocks and bonds issued by other companies;
Term
What is a corporate bond? What would be an example?
Definition
a bond that a corporation issues to raise money effectively and expand its business
Term
What is interest rate risk?
Definition
the risk associated with the possibility than an investment made may be inferior in the future
Term
What is the yield? it is the same as a _____.
Definition
bond's annual coupon interest divided by purchase price; measure of a bonds return; same as the dividend
Term
What is a stock broker?
Definition
a broker who buys and sells securities on a stock exchange on behalf of clients
Term
What is the NYSE?
Definition
new york stock exchange; it is a bull market; the Dow Jones Industrial Association association is the index for the nyse
Term
What is the Dow Jones Industrial Average?
Definition
a measure of stock market performance based on 30 representative stocks; it is the most popular measure of stock marekt performance
Term
What is an over the counter market?
Definition
electronic marketplace for securities not listed on organized exchanges such as the NYSE
Term
What is the NASDAQ?
Definition
the most important over the counter market; stands for National Association of Securities Dealers Automated Quotation; it is the world's largest electronic stock market
Term
What is liquidity?
Definition
the availability of liquid assets to a market or company
Term
What is the efficient market hypothesis?
Definition
argument that stocks are always priced about right because they are closely watched
Term
What is an IPO?
Definition
initial public offering
Term
What is a call option?
Definition
a contract to buy stock at a specified time in the future
Term
What is a put option?
Definition
futures contract wher you can make someone buy from you in the future
Term
what is a bull market? example?
Definition
stong market; new york stock exchange
Term
What is a bear market? example?
Definition
weak market
Term
What is liquidity risk?
Definition
the risk of not being able to meet financial obligations when they come due
Term
What is a treasury bond?
Definition
a US government bond with a maturity of 10 to 30 years
Term
What are the three main characteristics of money?
Definition
medium of exchange, measure of value, store of value
Term
What is the risk assoaciated with losing your initial investment or your principal amount?
Definition
credit risk
Term
What does IRA stand for?
Definition
individual retirement account
Term
What is it called when the corporation doubles the number of shares but cuts the price?
Definition
stock split
Term
What is the name of a bond where you pay fifty dollars for it but you get a lot more back?
Definition
savings bond
Term
What is the efficient market hypothesis?
Definition
it is impossible to time the market
Term
What is the first move you make in selling a stock?
Definition
sell at high prices, buy at low prices
Term
A fund set up to collect income and diburse payments to those persons eligible for retirement is the definition of a ____.
Definition
pension fund
Term
A long term, tax sheltered time deposit that an employee can set up to draw on in the future for retirement is called a____.
Definition
IRA-individual retirement account
Term
the profits of a company:
Definition
earnings
Term
typical number of shares traded on a typical day:
Definition
average volume
Term
rough estimate of how expensive the stock is verses its earnings
Definition
p/e ratio
Term
Number of shares traded that day:
Definition
volume
Term
the high and low stock price over the year:
Definition
52 week range
Term
the estimated stock price one year from now:
Definition
1 year target estimate
Term
all of the outstanding shares times the stock price:
Definition
market captialization
Term
profits paid out to shareholders:
Definition
dividend
Term
the total profits of the company divided by the total shares outstanding:
Definition
EPS
Term
An investor views a corporate bond as a financial asset generating a fututre payment stream for the life of the bond
Definition
Term
If a bond is traded at a discount then what must have happened?
Definition
interest rates on similar investments have risen
Term
bond price below par:
Definition
discount
Term
principal amount initially borrowed:
Definition
par value
Term
coupon divided by par value:
Definition
yield
Term
return, in dollars, due to the owner of the bond
Definition
coupon
Term
market value of the bond
Definition
bond price
Term
the due date of the bond
Definition
maturity
Term
bnd price above par
Definition
premium
Term
What are the three parts of the financial system?
Definition
funds, financial assets, organizations
Supporting users have an ad free experience!