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Investing and Financial Markets

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Darrell Zboncak

Lvl 10
โˆ™ 2021-10-22 18:34:04
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Cards in this guide (23)
What is the Gold Standard

The basing of a currency on gold. In some sense in such a system, gold IS the currency and money is a symbol for a corresponding amount of gold, backed by the issuer - i.e. the bank promises that by some means you are always able to exchange X of its currency for Y gold, and vice versa.

No country still uses the gold standard - modern currencies are free floating with their value determined by local markets and exchange rates with other currencies.

Even so, national governments still usually carry large gold reserves as a holdover from the time when they needed them as a physical guarantee. Gold has remained valuable over thousands of years so it can always be sold as needed for any currency (including its own) that a country might need, or bought to safely store wealth.

A currency system in which each dollar is worth 1/20 of an ounce of gold (gradpoint)

What is Standard and Poors

Standard and Poors is one of the 3 premier Credit Rating Agencies in the world.

What happens during a bank run

customers attempt to withdraw more money than the bank has on hand

What would add up 10.25 with quarters and dimes

to many to count... 100 dimes 1 quarter. 41 quarters. 50 dimes 21 quarters

Is a patent a financial asset

It could be. Financial assets are real assets.

When was the first Bank of the United States formed by the Federalists

in the late eighteenth century

The main advantage of diversification as an investment policy is that it

Reduces risks to investors

A collection of financial assets is known as an investors

Portofolio

How does a pension fund act as an investor

the company invests money collected from employers

In the financial system who are the borrowers

households, individuals, and businesses

What are objects called that have value in and of themselves as well as value as a means of exchange

commodity money

When you own a mutual fund what exactly do you own

Mutual fund is a low risk investment. If you invest in a mutual fund, you owns shares of the mutual fund company who is selling you fund. But you do not actually own any underlying asset of the stocks or securities that mutual fund has invested in even they are using your money to invest.

What is the option to sell shares of stock at a specified time in the future called

It's actually called a call option. I will provide you with a definition I just found for this, and some additional tips on options trading.

- - - - -

The option to sell shares is a put. The option to buy them is a call.

What is is the index that shows how 30 specific industrial stocks have traded called

The Dow Jones Industrial Average is the stock market index that shows how 30 specific industrial stocks have traded.

What is the annual rate of return on a bond bought on the open market called

yield

Which of the following is a true statement about the call option

It is a way for investors to avoid paying a future higher price of a stock.

NOVANET

What markets in which money is lent for periods longer than one year

Capital markets

What is the market for selling financial assets that can only be redeemed by the original holder

Primary Market

Why would business owners want to invest in capital goods

because

What is a fund that pools the savings of many individuals and invests this money in a variety of stocks bonds and other financial assets called

mutual fund

What is an institution that helps channels funds for savers to borrowers called

a financial intermediary

What is difference between a primary market and a secondary market

a primary market is financial assets that can be redeemed only by the original investor; a secondary market's assets can be resold

What happens if I don't pay back my student loans

Failing to pay back a student loan can have negative consequences. It can negatively effect your credit score.

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