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BUSN-1010 Conroy 16
Chapter 16
Question | Answer |
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Bonds | Long-term IOUs issued by governments and corporations, contracts on which the issuer pays the buyer interest at regular intervals. |
Budget | A detailed financial plan showing estimated revenues and expenses for a particular future period, usually one year. |
Collateral | The asset that is pledged to secure a loan, and it can be seized by the lender if the borrower does not repay the loan. |
Commercial Bank | A Federal or state chartered profit-seeking financial institution that accepts deposits from individuals and businesses and uses part of them to make personal, residential, and business loans. |
Credit Unions | Depositor-owned, nonprofit financial cooperatives that offer a range of banking services to their members. |
FDIC | An independent agency of the U.S. government that insures bank deposits. |
Federal Reserve System | Also called the Fed, the central bank of the U.S., which controls the money supply. |
Finance | Also called corporate finance, the business function of obtaining funds for a company and managing them to accomplish the company's objectives. |
Money | Any medium of value that is generally accepted as payment for goods and services. |
Nonbanks (non deposit institutions) | Financial institutions that do not accept deposits but offer some of the services that banks provide. |
Risk-return Trade-off | The activity in which financial managers continually try to balance the firm's investment risk with the expected return, or payoffs, from its investments. |
Subprime Loans | Loans for people with blemished or limited credit histories, which carry a higher rate of interest than prime loans to compensate for increased credit risk. |
Trade Credit | Short-term financing by which a firm buys a product, and then receives a bill from the supplier, then pays it later. |
Unsecured Loans | A loan in which the borrower does not pledge some sort of asset as collateral. |