Vocabulary
Profiles in Economics
Financial System
Nonbank Financial Intermediaries
Funds
100
What is the difference between saving and savings?
Saving means the absence of spending, while savings refers to the dollars that become available when people abstain from consumption.
100
Who is Helen Hayes?
a successful mutual fund manager
100
What makes investments possible?
Someone in the economy must save.
100
What are nonbank financial institutions?
nondepository institutions that channel savings to borrowers
100
What do mutual fund stockholders receive from their investments?
dividends
200
a. claims on the property and the income of the borrower b. financial institutions that lend the funds that savers provide to borrowers c. a firm that specializes in making loans directly to consumers and in buying installment contracts from merchants who sell goods on credit
a. financial assets b. financial intermediaries c. finance company
200
How does Helen Hayes do business?
She picks the right stocks and watches body language when meeting with an executive.
200
What are two ways people can save money?
savings account and certificate of deposit
200
What are some examples of these institutions?
finance companies, life insurance companies, pension funds, and real estate investment trusts
200
What does the large size of the typical mutual fund make possible?
Its large size makes it possible to hire a staff of experts to analyze the securities market before buying and selling securities and it also allows them to buy many different stocks and bonds.
300
a. the price the insured pays for this policy and is usually paid monthly, quarterly, or annually for the length of the protection b. a company that sells stock in itself to individual investors and then invests the money it receives in stocks and bonds issued by other corporations
a. premium b. mutual fund
300
Who is Edward Lewis?
Chairman and CEO of Essence Communications
300
What are the 3 of the main parts of the financial system?
The first is the funds that the saver transfers to the borrower. The second is the financial assets or receipts that certify that the loans were made. The other parts of the financial system are the savers, borrowers, and, institutions that bring the surplus funds and financial assets together.
300
What is the market value of a mutual fund share?
the net value of the mutual fund divided by the number of shares issued by the mutual fund
400
What is a regular payment intended to provide income security to someone who has worked a certain number of years, reached a certain age, or suffered a certain kind of injury?
Pension
400
What kind of company is Essence?
Essence is a magazine company that promotes African American culture by publishing artworks made by blacks and featuring black models.
400
What are some examples of financial intermediaries?
depository institutions, life insurance companies, pension funds, other institutions that channel savings from savers to borrowers
400
What do finance companies offer to loaners?
bill consolidation loans
400
What is a pension fund?
a fund set up to collect income and disburse payments to those persons eligible for retirement, old-age, or disability benefits
500
What is a company organized primarily to make loans to construction companies that build homes?
real estate investment trust (REIT)
500
What kind of meeting did Lewis attend in the late 1960s to help begin his career?
He attended a conference that encouraged black capitalism.
500
What are the two most important sectors of the economy that supply savings?
households and businesses
500
What is the primary purpose of a life insurance company?
Its primary purpose is to provide financial protection for survivors of the insured.
500
What is the primary purpose of REITs?
to help provide billions annually for home construction
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