Economics Chapter 11

A document showing that an investor has made an interest-bearing loan to the bank.

The price the insured pays for this policy.

Bonds issued by state and local governments. 

You pay $25

A bull market moves up, a bear market declines. 

Measure of stock market performance based on 30 representative stocks. 

Measure of stock market performance based on 500 stocks traded on the NYSE, AMEX, and OTC market. 

Absence of spending

The dollars that become available when people abstain from consumption. 

A stock or other document that represents a claim on the income and property of a borrower 

A non-bank financial institution set up to provide financial protection for survivors of the insured

The price the insured pays for the length of the protection. Life Insurance, health insurance, car insurance all pay premiums. 

A formal long term contract that requires repayment of borrowed money and interest on the borrowed funds at regular intervals over time. 

exceptionally risky

the total amount borrowed

A market, where existing financial assets can be resold to new owners

Safe

Low denomination, nontransferable bonds issued by the U.S. government that are also called EE savings bonds. (Bonds range from $50-$10,000 and they are purchased at the 1/2 the face value.)

2-10 years

10-30 years

$1000

Short term U.S government obligation with a maturity of one-year or less in denominators of $1000.

Over-the-counter market

Spot Market

Claims on the property and income of the borrower

Someone who inherits the ownership of the financial assets if the purchaser dies

A strong market with prices moving up for several months or years in a row. 

The annual interest divided by the purchase price

stocks that represent ownership shared in corporations

a person who buys or sells equities or stocks

a situation in which the outcome is not certain but the probabilities of different outcomes can be estimated

a market where money is loaned for periods of less than one year.

The right to buy something at a specific future price

an electronic marketplace for securities that are not traded on an organized exchange such as NYSE. 

NASDAQ

A regular payment intended to provide income security to someone who has worked a certain number of years, reached a specific age, or suffered an injury. 

A tax deferred investment and savings plan that acts as a personal pension fund for many employees . This comes from a payroll deduction. 

Before taxes or this money has not been taxed

Is holding a large number of stocks so that increases in some will offset unexpected declines in others. 

When the government does not tax interest paid on an investment. 

The right to sell something at a specific future price

Market in which prices of equities decline for several months or years.

A firm that makes loans to consumers and buys installment contracts from merchants who sell goods on credit.

A market where money is loaned for more than one year

A company that sells stock in itself to individual investors and then invests the money in stocks and bonds of other corporations. 

A popular benchmark of stock performance that uses the prices changes of 500 representatives stocks as an indicator of overall market performance.