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Chapter 11 Vocabulary Quiz

25 Questions
Vocabulary Quizzes & Trivia

“Savings & Investing, Bonds & Other Financial Assets, and the Stock Market”

Questions and Answers
  • 1. 
    1.       Bear Market
    • A. 

      Claims of ownership in a corporation.

    • B. 

      A steady drop in the stock market over a period of time.

    • C. 

      A market for buying and selling stocks.

    • D. 

      The annual rate of return on a bond if the bond were held to maturity.

  • 2. 
       Brokerage Firm
    • A. 

      Claims of ownership in a corporation.

    • B. 

      The collapse of the stock market in 1929.

    • C. 

      Market in which money is lent for periods less than a year.

    • D. 

      The practice of making high-risk investments with borrowed money in hopes of getting a big return.

    • E. 

      A business that specializes in trading stocks.

  • 3. 
    1.       Bull Market
    • A. 

      Market in which money is lent for periods less than a year.

    • B. 

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

    • C. 

      A steady rise in the stock market over a period of time.

    • D. 

      A person who links buyers and sellers of stocks.

  • 4. 
    1.       Capital Gain
    • A. 

      The difference between a higher selling price and a lower purchase price, resulting in a financial again for the seller.

    • B. 

      Claims of ownership in a corporation.

    • C. 

      Market in which money is lent for periods longer than a year.

    • D. 

      Portion of stocks.

  • 5. 
    1.       Capital Loss
    • A. 

      An electronic market place for stock that is not listed or traded on an organized exchange.

    • B. 

      Claims of ownership in a corporation.

    • C. 

      The interest rate that a bond issuer will pay to a bondholder.

    • D. 

      The difference between a lower selling price and a higher purchase price, resulting in a loss for the seller.

  • 6. 
    1.       Capital Market
    • A. 

      Contacts to buy or sell at a specific date in the future at a price specified today.

    • B. 

      Market in which money is lent for periods longer than a year.

    • C. 

      Index that shows how certain stocks have traded.

    • D. 

      Low-denomination bond issued by the United States government.

  • 7. 
    1.       Corporate Bond
    • A. 

      Spreading out investments to reduce risk.

    • B. 

      The amount that an investor pays to purchase a bond and that will be repaid to investor at maturity.

    • C. 

      Institution that helps channel funds from savers to borrowers.

    • D. 

      A bond that a corporation issues to raise money in order to expand its business.

  • 8. 
    Coupon Rate
    • A. 

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

    • B. 

      Market for reselling financial assets.

    • C. 

      The interest rate that a bond issuer will pay to a bondholder.

    • D. 

      The amount that an investor pays to purchase a bond and that will be repaid to investor at maturity.

  • 9. 
    1.       Diversification
    • A. 

      Spreading out investments to reduce risk.

    • B. 

      Institution that helps channel funds from savers to borrowers.

    • C. 

      The system that allows the transfer of money between savers and borrowers.

    • D. 

      Contacts to buy or sell at a specific date in the future at a price specified today.

  • 10. 
    1.     Equities
    • A. 

      Claims of ownership in a corporation.

    • B. 

      Claim on the property or income of a borrower.

    • C. 

      Institution that helps channel funds from savers to borrowers.

    • D. 

      The system that allows the transfer of money between savers and borrowers.

  • 11. 
    1.       Financial Asset
    • A. 

      The act of redirecting resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit.

    • B. 

      The time at which payment to a bondholder is due.

    • C. 

      Market in which money is lent for periods less than a year.

    • D. 

      A bond issues be a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks, and schools.

    • E. 

      Claim on the property or income of a borrower.

  • 12. 
    1.       Financial Intermediary
    • A. 

      A market for buying and selling stocks.

    • B. 

      Institution that helps channel funds from savers to borrowers.

    • C. 

      The practice of making high-risk investments with borrowed money in hopes of getting a big return.

    • D. 

      Market for reselling financial assets.

  • 13. 
    Financial System
    • A. 

      The system that allows the transfer of money between savers and borrowers.

    • B. 

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

    • C. 

      Index that shows the price changes of 500 different stocks.

    • D. 

      Low-denomination bond issued by the United States government.

    • E. 

      Market for reselling financial assets.

  • 14. 
    Futures
    • A. 

      Contacts to buy or sell at a specific date in the future at a price specified today.

    • B. 

      A steady drop in the stock market over a period of time.

    • C. 

      A business that specializes in trading stocks.

    • D. 

      A steady rise in the stock market over a period of time.

  • 15. 
    1.       Great Crash
    • A. 

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

    • B. 

      Spreading out investments to reduce risk.

    • C. 

      A bond that a corporation issues to raise money in order to expand its business.

    • D. 

      The collapse of the stock market in 1929.

  • 16. 
    Investment
    • A. 

      Market for selling financial assets that can only be redeemed by the original holder.

    • B. 

      The act of redirecting resources from being consumed today so that they may create benefits in the future; the use of assets to earn income or profit.

    • C. 

      Low-denomination bond issued by the United States government.

    • D. 

      The practice of making high-risk investments with borrowed money in hopes of getting a big return.

  • 17. 
    Maturity
    • A. 

      An independent agency of the government that regulates financial markets and investment companies.

    • B. 

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

    • C. 

      The time at which payment to a bondholder is due.

    • D. 

      American market for OTC (over-the-counter) securities.

  • 18. 
    1.       Money Market
    • A. 

      A bond that a corporation issues to raise money in order to expand its business.

    • B. 

      Market in which money is lent for periods less than a year.

    • C. 

      American market for OTC (over-the-counter) securities.

    • D. 

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

  • 19. 
    Municipal Bond
    • A. 

      Contacts to buy or sell at a specific date in the future at a price specified today.

    • B. 

      A bond issues be a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks, and schools.

    • C. 

      The annual rate of return on a bond if the bond were held to maturity.

    • D. 

      The division of a single share of stock into more than one share.

  • 20. 
    1.       Mutual Fund
    • A. 

      Fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets.

    • B. 

      An electronic market place for stock that is not listed or traded on an organized exchange.

    • C. 

      A collection of financial assets.

    • D. 

      An investment report to potential investors.

  • 21. 
    Nasdaq
    • A. 

      The amount that an investor pays to purchase a bond and that will be repaid to investor at maturity.

    • B. 

      American market for OTC (over-the-counter) securities.

    • C. 

      Market for selling financial assets that can only be redeemed by the original holder.

    • D. 

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

    • E. 

      Index that shows the price changes of 500 different stocks.

  • 22. 
    OTC Market
    • A. 

      An electronic market place for stock that is not listed or traded on an organized exchange.

    • B. 

      Portion of stocks.

    • C. 

      A market for buying and selling stocks.

    • D. 

      Index that shows how certain stocks have traded.

    • E. 

      The annual rate of return on a bond if the bond were held to maturity.

  • 23. 
    Par Value
    • A. 

      An independent agency of the government that regulates financial markets and investment companies.

    • B. 

      Market for selling financial assets that can only be redeemed by the original holder.

    • C. 

      Low-denomination bond issued by the United States government.

    • D. 

      The amount that an investor pays to purchase a bond and that will be repaid to investor at maturity.

  • 24. 
    Portfolio
    • A. 

      A collection of financial assets.

    • B. 

      Claim on the property or income of a borrower.

    • C. 

      An investment report to potential investors.

    • D. 

      Portion of stocks.

    • E. 

      The practice of making high-risk investments with borrowed money in hopes of getting a big return.

  • 25. 
    Primary Market
    • A. 

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

    • B. 

      Market for selling financial assets that can only be redeemed by the original holder.

    • C. 

      An independent agency of the government that regulates financial markets and investment companies.

    • D. 

      The practice of making high-risk investments with borrowed money in hopes of getting a big return.

    • E. 

      The annual rate of return on a bond if the bond were held to maturity.