the collection of financial markets and institutions that interact to facilitate the exchange and regulation of financial assets
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real economy
the place where buyers and sellers participate in the trade of goods and services; in practice, the sum of all economic activities related to the production and distribution of goods and services within a society
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financial market
a place where buyers and sellers participate in the trade of financial assets; in practice, the sum total of the foreign exchange market, the debt market, the equity market, and the derivative market
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financial asset
a contract that derives its value from a claim to cash produced by a different asset (usually a real asset)
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asset class
a group of assets with similar characteristics
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currency
a medium of exchange used to purchase goods and services
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debt instrument
an investment which represents borrowed money that needs to be repaid
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equity instrument
an investment which represents ownership in a company
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derivative instrument
an investment whose value is determined by and based upon the value of another asset (the value is derived from an underlying asset)
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financial instrument
a contract that represents an asset to one person and a liability or equity to another person
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money market instrument
an investment that matures in less than one year
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foreign exchange market
the place where currency is bought and sold (also called the forex market)
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debt market
the place where debt instruments are bought and sold
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stock market
the place where equity instruments are bought and sold
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derivative market
the place where derivative instruments are bought and sold
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money market
the place where financial assets that mature in less than one year are bought and sold; usually considered a subset of the debt market
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capital market
the place where financial assets that mature in more than one year are bought and sold (this is where companies raise capital, hence the name)
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bond market
the place where bonds are bought and sold; usually considered a subset of the debt market
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fiat currency
a type of money issued by the government
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cryptocurrency
a decentralized, virtual currency
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treasury bond
debt issued by the U.S. government that matures between 10 and 30 years
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corporate bond
debt issued by companies to fund their long-term operations (capital budget)
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common stock
ownership in a company that entitles the shareholder to a portion of the company's profits
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preferred stock
ownership in a company with no voting rights but a fixed dividend
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treasury bills
debt issued by U.S. government that matures in less than 1 year
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commercial paper
debt issued by companies to fund their short term operations (working capital) that matures in less than 270 days
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