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Financial Markets
| Question | Answer |
|---|---|
| receipt showing that an investor has made an interest-bearing loan to the financial institution | certificate of deposit (CD |
| monthly, quarterly, semiannual, or annual price paid for an insurance policy | premium |
| fund that collects and invests income until payments are made to eligible recipients | pension fund |
| the technique of spreading funds over a large number of investments to reduce the portfolio's overall risk | diversification |
| formal contract to repay borrowed money and interest on the borrowed money at regular future intervals | bond |
| an agreement to buy or sell at a specific future date at a predetermined price | futures contract |
| the right to buy something at a specific future price, or cancel if the actual future price is not advantageous to the buyer. | call option |
| the right to sell something at a specific future price, or cancel if the actual future price is not advantageous to the buyer | put option |
| exceptionally risky bond with a Standard & Poor’s rating of BB or lower that carries a high rate of return as compensation for the higher possibility of non-payment | junk bonds |
| a type of investment, often tax exempt, issued by state and local governments; known as munis | municipal bonds |
| low-denomination, non-transferable bonds issued by the federal government, usually through payroll savings plans | savings bonds |
| United States government obligation with a maturity of 2 to 10 years | Treasury notes |
| United States government bond with maturity of 30 years | Treasury bonds |
| short-term United States government obligation with a maturity of 4, 13, 26, or 52 weeks and a minimum denomination of $100 | Treasury bills |
| retirement account in the form of a long-term time deposit, with annual contributions not taxed until withdrawn during retirement | Individual Retirement Accounts (IRAs) |
| market in which financial capital is loaned and/or borrowed for more than one year | capital market |
| a market in which financial capital is loaned and/or borrowed for one year or less | money market |
| market in which only the original issuer can sell or repurchase a financial asset; government savings bonds, IRAs, small CDs | primary market |
| market in which all financial assets can be sold to someone other than the original issuer; corporate bonds, government bonds | secondary market |
| stocks that represent ownership shares in corporations | equities |
| company that sells shares of a portfolio of securities, e.g., stocks and bonds issued by other | mutual fund |
| The two largest stock exchanges | NYSE Euronext and AMEX-NASDAQ |
| a tax-deferred investment and savings plan that acts as a personal pension fund for employees | 401(k) plan |
| an index of 30 representative stocks used to monitor price changes in the overall stock market | Dow Jones Industrial Average (DJIA) |
| the most common stock issued by a company with voting rights | Common Stock |
| period during which stock market prices move up for several months or years in a row | bull market |
| period during which stock market prices move down for several months or years in a row | bear market |
| a company that is a separate legal entity owned by stockholders | corporation |
| When investors sell stocks for more than they paid | capital gain |
| are the portion of a corporation’s profit that is paid to shareholders | dividends |
Created by:
jeremyc-12