Financial Markets

A portion of your income that you do not spend on your current needs, but instead set aside for future needs.

• Collateral
• Discretionary Income
• Savings
• Net Worth

An investment is the use of income today in a way that allows for a future benefit.

• false

• true

Which of the following institutions are considered financial intermediaries?

• Navy Federal Credit Union

• Bank of America

• 1st Franklin Finance Company

• Alfa Insurance Company

• Pick N Save

A type of savings that signifies that you own a part of a corporation and a claim to their assets and earnings.

• Stock

• Share

• Dividend

• none is correct

Which of the following are intermediaries between people who save money and people who borrow money?

• Political candidates

• Government officials

• Banks, credit unions, financial institutions

• Schools or colleges

What is a large pool of money that several people put together and that is usually invested in stocks and bonds and managed by a financial expert.

• lottery

• mutual fund

• investment

The simple interest formula is I=Prt. What is the total amount of interest earn that will be earned over 5 years if the initial deposit was $2,000 dollars and with a rate of 5%?

• 50

• 500

• 5,000

• 5,500

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

• secondary market

• primary market

• financial system

• capital market

Capital Market is a market for

• long term assets

• short term assets

• Medium term assets

• none of the above

Why do companies issue stocks?

• To create and investment opportunity into other businesses.
• To increase employee cooperation and an operating level.
• To be traded individually
• To raise money for economic investment and to fund operating costs.