Lesson Flashcard 11-1: Financial Markets

Front

The economy produces capital when __________ become available to borrowers.

Back

funds

Front

Institutions that channel savings to investors such as banks, insurance companies, and credit unions are called __________ __________.

Back

financial intermediaries

Front

The overall network of institutions working together to transfer savings to investment uses is known as the __________ __________.

Back

financial system

Front

The degree to which the outcome of an investment is uncertain, but a probable outcome can be estimated, is called the __________ of an investment.

Back

risk

Front

Most successful investors invest _________.

Back

consistent contributions over a long period of time

Front

When making a risky investment, investors usually demand a _________.

Back

higher compensation

Front

Which of the following best describes the role of the consumer in the flow of the financial system? A. People have places to safely save and borrowers have sources of financial capital. B. People have places to invest in financial markets and borrowers have guaranteed economic growth. C. People can spend all their money on goods, thus providing a source of financial capital. D. People can save all their money, creating a lack of financial capital.

Back

People have places to safely save and borrowers have sources of financial capital.

Front

Commercial banks and brokerage firms are examples of:

Back

financial intermediaries