ECON CHAPTER 16

Another person or firm who legally pledges to repay some or all of the money loaned if the original borrower fails to do so is called a ________________ .
A. Warrantor
B. cosigner
C. guaranty
D. codebtor
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Another person or firm who legally pledges to repay some or all of the money loaned if the original borrower fails to do so is called a ________________ .
A. Warrantor
B. cosigner
C. guaranty
D. codebtor
B
_____________ that are issued by government agencies are a form of validation that a worker has completed a certain type of education or passed a certain test.
A. Service contract licenses
B. Occupational insurance licenses
C. Industrial licenses
D. Occupational licenses
D
A ______________________ is a promise that the buyer's money will be refunded under certain conditions.
A. service contract
B. money-back guarantee
C. insurance policy
D. warranty
B
In the investment industry, the principle of _____________ supports investing in a wide range of companies to reduce the level of risk.
A. fundamentals trading
B. buying low and selling high
C. diversification
D. subprime loans
C
Treasury bonds are issued by the federal government through the
A. Federal Reserve
B. U.S. Department of the Treasury
C. U.S. Office of the Comptroller of Currency
D. Central Bank
B
In the insurance industry, homeowners are referred to as _______________ who share roughly the same risks of an adverse event occurring.
A. a risk group
B. an adverse group
C. premium group
D. an uninsurable group
A
A bond is a form of _______________________ through which a corporation agrees to repay the amount that was borrowed together with ____________________________ over a period of time in the future.
A. financial investment; guarantees the investment
B. initial public offering; a rate of interest
C. a financial contract, a rate of interest
D. financial instrument; a rate of return
C
The __________________ of an investment is determined by how easy it is to sell an asset at any given time.
A. profitability
B. sustainable outcome
C. expected profitability
D. liquidity
D
_________________ are a form of _________________ bonds that offer relatively high interest rates to compensate for their relatively high chance of default.
A. Certificates of deposit; bank
B. Bonds; government
C. Junk bonds; corporate
D. High-yield bonds; municipal
C
A ___________________ is a firm that has sold its stock by making it available to be bought and sold by outside investors.
A. public company
B. business entity
C. private company
D. public proprietorship
A