Chapter 11: Financial Markets Review

Front

formal contract to repay borrowed money and interest on the borrowed money at regular future intervals

Back

bond

Front

a market in which financial capital is loaned and/or borrowed for at least one year

Back

capital market

Front

stocks that represent ownership shares in corporations

Back

equities

Front

an agreement to buy or sell at a specific date in the future at a predetermined price

Back

futures contract

Front

a network of savers, investors, financial assets, and financial institutions that work together to transfer savings to investment uses

Back

financial system

Front

a strategy of holding different kinds of investments to minimize risk

Back

portfolio diversification

Front

a market in which only the original issuer can sell or repurchase a financial asset

Back

primary market

Front

a situation in which the outcome is not certain, but the probabilities can be estimated

Back

risk

Front

the dollars that become available for investors to use when others refrain from consuming

Back

savings

Front

a market in which all financial assets can be sold to someone other than the original issuer

Back

secondary market