Chapter 11 Section 1: Savings and Investments

It is a claim on the property of the borrower

• Financial market

• Financial intermediary

• Financial asset

• Financial system

It is all the institutions that help transfer funds between savers and investors.

•   Financial market

• Financial intermediary

• Financial asset

• Financial system

It is an investment company that gathers money from individual investors and purchases a range of financial assets.

• Banking Financial intermediaries

• ATM card

• Saving account

• Mutual fund

This market is for buying financial assets directly from the issuer.

• Capital market

• Primary market

• Money market

•   Secondary market

  How do secondary markets give investors liquidity?

•   Those that require large amount of money are given

• They allow investors to resell their financial assets at any time in cash

• They allow saving account to continue for a continuous period of time

• It is a time sensitive market where assets are held for a longer period of time

What kind of projects are financed through the capital market?

• Those that require large amounts of money

• Those that require small amount of money

• Those that do not require any funding at all

• Those that require neither of the above terms

The term primary market also refers to the market where the first issue of a stock is sold to the public through investment bankers

• True

• False

Mutual funds make it easier and more affordable for individual investors own a small variety of financial asset.

• True

• False

It involves putting money in financial assets in order to make money.  

• Personal investment

• Economic investment

• Non-fund investment

• Economic concepts

  It involves lending money to businesses.

• Personal investment

• Economic investment

• Non-fund investment

• Economic concepts