Econ Ch 11 Review

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

• bond

• futures contract

• equities

• risk

Stocks that represent ownership shares in corporations.

• equities

• savings

• bond

• capital market

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

• savings

• bonds

• equities

• risk

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

• risk

• futures contract

• primary market

• bond

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

• capital market

• primary market

• secondary market

• financial system

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

• secondary market

• primary market

• futures contract

• capital market

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

• bond

• equities

• futures contract

• risk

A strategy of holding different kinds of investments to minimize risk.

• capital market

• futures contract

• savings

• portfolio diversification

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

• capital market

• primary market

• secondary market

• financial system

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

• capital market

• financial system

• primary market

• savings