Stocks and Bonds

http://www.mhhe.com/economics/frankb/graphics/frankb_s/ch23/slideshows/man/ch23_files/frame.htm

Go to the above slide show and using slides 4-21,   complete the following questions:

1 List the goals of the banking system

2  Define :

bond

principal amount

coupon rate

coupon payment

3  Why do businesses and government issue bonds ?

4  What determines the coupon rate of a bond ?

5 Define  stock

6    How do stockholders get returns on their investment ?

7  How do corporations use the bond and stock markets to raise funds ?

8 Define:

 diversification

mutual fund