Chapter 31: Investing

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29 Terms

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Liquidity
________ refers to how easily an investment can be turned into cash.
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Security
A(n) ________ is a tradable document that shows evidence of debt or ownership.
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Municipal bonds
________ are sold to finance city, town, or regional projects such as schools, highways, and airports.
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yield
The return on an investment is the amount of money the investment earns, or the ________.
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Treasury bills
________ are sold in units of $ 1, 000.
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SEC
Companies that sell stock must follow rules set up by the Securities and Exchange Commission, or ________.
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construction
They are usually used to finance ________ and equipment.
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NASDAQ
The ________ is an electronic stock market system that quotes over- the- counter securities.
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Stockbroker
A(n) ________ is a person who buys and sells stocks, bonds, and other securities for clients.
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EE
A Series ________ savings certificate costs half the amount of its face value to buy.
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possibility of profit
Investing is using money to participate in an enterprise that offers the ________.
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Bonds
________ may be sold at a discount, or below their face value.
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Capital loss
A(n) ________ is an amount lost when an asset is sold for less than its cost.
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T bills
________ are discounted securities, which means the purchase price that investors pay is less than the face value of the ________.
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Dividends
________ are usually paid quarterly in cash or in more shares of stock.
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Capital gain
A(n) ________ is a profit made from the sale of a financial asset such as stock or a bond.
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interest rates
Generally, the ________ on notes and bonds are higher than on T- bills because of the increased risk of the rates rising or falling during the length of time until the note or bond matures.
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Mutual funds
________ lessen the risk of investing in the stock market.
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Face value
________ is the value of a security that is set by the company or government that is issuing it.
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Maturity date
A bond is a certificate issued by a government or company in which it promises to pay back borrowed money at a fixed rate of interest on a specified date (the ________)
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Stock
A(n) ________ is a share of ownership in a corporation.
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US Treasury Department
The ________ issues four basic types of securities: Treasury bills (or T- bills), notes, bonds, and savings bonds.
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Corporate bonds
________ can be bought and sold through brokerage firms.
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SEC
The ________ is a U.S. government agency that supervises the exchange of securities to protect investors from wrongdoing.
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Stockbrokers
________ act as a link between buyers and sellers.
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mutual fund
A(n) ________ is a fund created by an investment firm that raises money from many shareholders and invests it in a variety of stocks or other investments.
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There are two types of bonds you can buy
government bonds and corporate bonds
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The U.S. Treasury Department issues four basic types of securities
Treasury bills (or T-bills), notes, bonds, and savings bonds
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However, a big advantage of stocks is that long
term comparisons of returns on stocks and returns from savings accounts or bonds show stocks do better over time