Chapter 11: Financial Markets Review

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

• bond

• capital market

• equities

• futures contract

• financial system

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

• bond

• capital market

• equities

• futures contract

• financial system

stocks that represent ownership shares in corporations

• bond

• capital market

• equities

• futures contract

• financial system

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

• bond

• capital market

• equities

• futures contract

• financial system

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

• bond

• capital market

• equities

• futures contract

• financial system

a strategy of holding different kinds of investments to minimize risk

• portfolio diversification

• primary market

• risk

• savings

• secondary market

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

• portfolio diversification

• primary market

• risk

• savings

• secondary market

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

• portfolio diversification

• primary market

• risk

• savings

• secondary market

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

• portfolio diversification

• primary market

• risk

• savings

• secondary market

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

• portfolio diversification

• primary market

• risk

• savings

• secondary market