vocab quiz 1 stocks and bonds

Bond

debt security where the issuer agrees to make regular payments for a set time.

Foreign Exchange Market

A market where exchange rates are determined, helping move money between countries.

Financial Crises

Big disruptions in financial markets with sharp drops in asset values and many company failures.

Monetary Policy

Actions to control interest rates and the money supply.

Conflict of Interest

When one side of a deal puts its own interests ahead of the other’s.

Economies of Scope

Growing a business by offering many products in one convenient location.

Eurobonds

Bonds sold in a country but using a different currency.

Moral Hazard

The risk that one party in a deal will act in a way that harms the other.

Investment Banks

Banks that help companies in the initial sale of securities in the primary market through underwriting.

Adverse Selection

A problem where before the deal, the wrong people are most likely to want a deal, due to hidden information.