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Economics with Mrs. Duez
Chapter 12—Financial Markets
Main Ideas: **The components of a financial system work together to transfer savings to investors.
**To invest wisely, investors must identify their goals and analyze the risk and return involved.
**Equities or stocks, represent ownership of a corporation.
Learning Target Statements--Objectives

I can explain why savings is important for capital formation.
savings

I can explain how the financial system works to transfer funds from savers to borrowers.
certificate of deposit
financial assets
financial intermediaries

I can understand the role of the major nondepository financial institutions in the financial
system.
nonbank financial institutions
finance company
bill consolidation loans
premium
mutual fund
pension
pension fund

I can identify four important investment considerations.
risk
investment objectives
simplicity
Chapter12
Section 1
Chapter 12
Section 2

I can describe the three characteristics of bonds.
coupon
maturity
par value

I can describe the characteristics of major financial assets.
certificates of deposit
corporate bonds
government savings bonds
treasury notes and bonds
individual retirement accounts

Chapter 12
Section 3


consistency
municipal bonds
treasury bills
I can understand four views of markets for financial assets.
capital markets
money markets
primary markets
I can describe the major stock exchanges.
portfolio
stockbroker
NYSE
AMEX
I can explain how stock market performance is measured.
Dow-Jones Industrial Average
Standard and Poor’s 500
secondary markets
NASDAQ
Bull vs Bear market