Types of Bonds
Corporate Bonds
A bond issued by a corporation to help raise money for expansion
What are the two types of Banks?
Commercial Banks: no one can touch your money
Investment Banks: use money to grow your portfolio
Whats more risky: Stocks or Bonds?
Stocks
What are the 3 uses of money?
Medium of exchange, unit of account: comparing values of g/s, store of value
Savings Bond
A low denomination bond issued by the United States government
What are 2 characteristics of free banking?
Bank runs + panic, fraud, different currencies, "Wildcat Bank"
What is a stockbroker
A person who links buyers and sellers of stock
Whats a way that a bank can save your money?
Checking account, savings account, MMA, CD
Junk Bond
A bond with high risk and potentially high yield
What is "Legal Tender"?
Another name for Fiat money: dollar bills, gov will control that supply
What is prospectus?
An investment report that provides information to potential investors
What is return?
Money above and beyond what was originally invested
Municipal Bond
A bond issued by a state, local gov, or municipality to finance a public project
What do banks do?
Receive, keep, and lend money
What is liquidity?
The ability to turn assets into cash
_____________ : the strategy of spreading out investments to reduce risk
Diversification
Inflation-Indexed Bonds
A bond that protects the investor against inflation by its linkage to an index of inflation
What is Specie?
Gold and silver coins
Stocks are issued in portions known as __________
Shares
What are 2 characteristics of money
Durability, Portability, Divisible, Uniformity, Limited Supply, Acceptability