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23 terms

Money And Banking ch. 1

STUDY
PLAY
Asset
Anything of value owned by a person or a firm
Financial Asset
An asset that represents a claim on someone else for a payment
Security
A financial asset that can be bought and sold in a fin. market
Financial Market
A place or channel for buying or selling stocks, bonds, and other securities.
Money
Anything that is generally accepted in payment for goods and services or to pay off debts
Money supply
The total quantity of money in the economy
stock
financial securities that represent partial ownership of a firm; also called equities
Dividend
A payment that a corporation makes to its shareholders
Bond
A financial security issued by a corporation or a government that represents a promise to repay a fixed amount of money
Interest rate
The cost of borrowing funds (or the payment for lending funds, ), usually expressed asa a percentage of the amount borrowed
Foreign exchange
Units of foreign currency
Securitization
The process of converting loans and other financial assets that are not tradable into securities
Financial Liability
A fin claim owned by a person or firm
Financial Intermediary
A fin firm, such as a bank, that borrows funds from savers and lends them to borrowers
Commercial bank
a fin firm that serves as a fin intermediary by taking in deposits and using them to make loans
Portfolio
collection of assets, such as stocks and bonds
Primary Market
a fin market in which stocks, bonds, and other securities are sold for he first time
Secondary Market
a fin market in which investors buy and sell existing securities
Monetary Policy
The actions the fed reserve takes to manage the money supply and interest rates to pursue macroeconomic policy objectives
Federal funds rate
the interest rate that banks charge each other on short term loans
Risk sharing
a service that financial system provides that allows savers to spread and transfer risk
Liquidity
the ease with which an assert can be exchanged for money
Information
facts about borrowers and about expectations of returns on fin assets