Corporate Bonds ✔✔A debt instrument that is issued by a corporation in order to raise capital.
stock ✔✔A share of ownership in a corporation.
money market ✔✔a type of financial market used for short-term assets that ar
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Corporate Bonds ✔✔A debt instrument that is issued by a corporation in order to raise capital.
stock ✔✔A share of ownership in a corporation.
money market ✔✔a type of financial market used for short-term assets that are held for less than
one year
capital market ✔✔a type of financial market used for long-term assets that are held for greater
than a year
primary market ✔✔A financial market in which new issues of a security are sold to initial
buyers.
syndicate ✔✔a group of intermediaries that is used to oversee the issuance of stock and/or bonds
secondary market ✔✔market for reselling financial assetsWhat is the purpose of financial markets ✔✔to determine the market price of financial securities
based on supply and demand and to provide liquidity
money market ✔✔is for short-term borrowing/ lending
capital market ✔✔is for long-term borrowing/ lending
A specialist ✔✔provides liquidity and lowers the cost of trading stocks between sellers and
buyers
In which financial market are securities such as stocks and bonds are traded after their initial
issuance? ✔✔Secondary market
Money circulates through financial institutions in 2 ways ✔✔1) individuals and organizations
lend and borrow money
2) individuals and organizations purchase financial securities to provide capital to companies and
receive dividendsmajor types of financial institutions ✔✔depository institutions
non depository institutions
securities and investment firms
Central Bank ✔✔Ensure that a nation's economy remains healthy by controlling the amount of
money circulating in the economy
Banks and credit unions ✔✔Receive deposits and extend loans to individuals and businesses
insurance ✔✔charge premiums to invest bondsand stocks to pay claims
mutual funds ✔✔offer investments and buy financial securities and instruments on behalf of
investors
pension funds ✔✔retirement funds contributed through companies to invest and provide
retirementinvestment banks ✔✔offer various services such as underwriting, facilitating mergers, and
trading financial securities on behalf of large institutions and companies
Private Equity ✔✔receive money from institutional investors and wealthy individuals to buy
high-potential companies or troubled companies to improve and earn returns by selling them or
going public
A large corporation is looking to merge with another large corporation. Which financial
institution can help them do this? ✔✔Investment bank
leading indicators ✔✔change before the economy changes and include yield curve and stock
market return
lagging indicators ✔✔change after the economy changes and include unemployment rate and
CPI
Coincident indicators ✔✔are collected and analyzed as economic shifts happen and include GDP
and personal incomeUnemployment rate is which type of economic indicator? ✔✔Lagging
In what way are coincident indicators useful? ✔✔They are analyzed during economic shifts to
provide information about the current state of the economy.
Yield curve is which type of economic indicator? ✔✔Leading
About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury
note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while
the 10-year Treasury note has an interest rate of 2.28%. What does this information indicate
about the future economy? ✔✔It may indicate an economic downturn.
Which responsibility is a focus of the U.S. Securities and Exchange Commission? ✔✔To protect
investors
Which type of financial institution provides individuals and firms access to financial markets?
✔✔Investment institutionsWhich financial institution includes entities that receive money from institutional investors and
wealthy individuals to buy troubled companies to improve them and earn returns by selling them
or going public? ✔✔Private equity
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