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Macro Chapter 10
Macro Chapter 9
| Term | Definition |
|---|---|
| financial intermediaries | firms that help to channel funds from savers to borrowers |
| Banks | are private firms that accept deposits and extend loans |
| indirect finance | activity in the loanable funds market when savers deposit funds into banks, which then loan these funds to borrowers |
| direct finance | activity in the loanable funds market when borrowers go directly to savers for funds |
| security | a tradable contract that entitles its owner to certain rights |
| bond | a security that represents a debt to be paid; an IOU that joins two parties in a contract that specifies the conditions for repayment of a loan, where typically a firm or government the borrower and typically an individual is the lender |
| maturity date | on a bond, the date in the future when the loan repayment is due |
| face value | the value of a bond at maturity—the amount due at repayment; also called par value |
| par value | the value of a bond at maturity—the amount due at repayment; also called face value |
| default risk | the risk that a borrower will not pay the face value of a bond on the maturity date |
| stocks | ownership shares in a firm |
| secondary markets | markets in which securities are traded after their first sale |
| Treasury securities | the bonds sold by the U.S. government to pay for the national debt |
| securitization | the creation of a new security by combining otherwise separate loan agreements |
Created by:
v.virgil
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