Ch 14 & 15 Test Review EPF (Investing)

annual rate of return on a bond if the bond is held to maturity

The main purpose of the FDIC is to make sure that:

If interest is 10% per year, how much interest do you earn on $133.10 in a year?

Coins are easier to use than gold bars as money because coins are more

If you exchange goods for payment of services, this is called

Network of structures & mechanisms that allows transfer of money between savers and borrowers

contracts to buy or sell commodities at a particular future date at a price specified today

practice of making high-risk investments with borrowed money

difference between selling price & purchase price that results in a financial loss for seller

Since bonds are considered among the safest investments, they usually

What is fractional reserve banking?

You have $2000 and need it soon, so put it in a saving account because you are concerned about

Where can you earn most interest on $1000 you won't need to use for a year?

When people lose confidence in a currency, the currency lacks ___________.

Why should you choose a bank loan over a finance company?

Institution that helps channel funds from saver to borrowers

bond issued by a corporation to help raise money for expansion

What is the difference between how simple & compound interest are paid?

What do people use mortgages to buy?

What happens during a bank run?

You want to spread out your investment money into different businesses. You should invest in __

steady rise in the stock market over a period of time

market in which money is lent for periods of one year or less

The largest source of income for banks is

What is a prospectus?

steady drop or stagnation in the stock market over a period of time

bond that protects the investor against inflation by its linkage to an index of inflation

Which investments is likely to provide the highest return?

market for reselling financial assets

Why are money market mutual funds riskier than savings accounts?

contracts that give investors right to buy or sell at a price at a future date

What happens when you pay bills using a computer?

money an investor receives above and beyond the sum of money initially invested

difference between the selling & purchase price that results in a financial gain for the seller

What does a mutual fund do?

To finance a new school, a local government is most likely to issue a