chapter 15 section 1,2,3 assessment

section 1:
1.benefits are to promote economic growth. risks is like you could lose money.
2.investment is something bought for future financial benefit. system , financial intermediaries , financial assets. fund.
5.because the information is printed in an investment report and that is the purpose of prospectus.
section 2: support goverenment in times and to earn income. rate is the interest rate , maturity is the time when the loan is to be repaid , par value is the amount repaid to the investor when the bond matures. finance war and to pay for public works projects. protects investers against inflation by linking to an inflation index.
1.once the bond is sold ,the coupon rate for that bond will not go up or down.
2.unlike stock holders , bondholders do not own a part of the company.
1.the company must make interest payments.
2.suppose the firm is doing poorly.
section 3:
1.the stock market works by opening accounts with the broker and the stock offered on a market.
2.a stockbroker has a license to buy an sell stocks. you must be at least 18 years old to open an account.
3.these are markets for buying or selling stocks. the new york stock exchanged is the largest stock exchange in the world.
4.a capital gain is the difference between a higher selling price that results in a financial gain for the seller. a capital loss is the difference between a lower selling price and a higher purchase price that results in a financial loss for the seller.
5.because its making high- risk investments using borrowed money.

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