Microsoft Word - Money, Banking, and Int Finance(scribd).docx

Money, Banking, and International Finance

interest
maturity
money market

automated teller machine (ATM)

debit card

The Common Financial Instruments

common stock
bond
U.S. Treasury bill (T-bill)
commercial paper
banker’s acceptance
negotiable bank certificate of deposit
repurchase agreement
Federal Funds
Eurodollars

Treasury Note (T-note)

Treasury Bond (T-bond)

general-obligation bond

revenue bond

mortgage

mutual fund

money-market mutual fund (MMMF)

money market deposit account (MMDA)

Chapter Questions

1. Why would people deposit their savings into financial intermediaries, instead of directly
   investing in the financial markets?


2. Distinguish between stocks and bonds.


3. Distinguish between the primary and secondary markets.


4. Appraise the importance of the secondary markets.


5. Define financial disintermediation, and why it occurs?


6. Identify the money market instruments and capital market instruments.


7. Distinguish between a money market and capital market.


8. Do common stocks have a maturity date?


9. Appraise the difference between a state bank and a national bank.


10. Which government agencies regulate the commercial banks?


11. Explain why the government regulates the banking sector.


12. Explain the role of the Federal Deposits Insurance Corporation (FDIC).


13. Identify the two methods the FDIC uses to handle a bank failure.