Econ test 2 chpt 6

  1. money management
    a series of decisions made over a short-term period regarding cash inflows and out flows
  2. liquidity
    your ability to cover any cash deficiencies that you may experience
  3. overdraft protection
    an arrangement that protects a customer who writes a check for an account that exceeds the checking account balance. it is a short term loan from the depository institution where the checking account is maintained
  4. stop payment
    a financial intitutions notice that it will will not honor a check if someone tries to cash it; usually occurs in response to a requast by the writer of the check
  5. NOW (negotiable order of withdrawl) account
    a type of deposit offered by a depository institutions that provides checking services and pays interest
  6. retail CD's
    certificates of deposite that have small denominations (such as 5000 or 10000)
  7. money market deposit account (MMDA)
    a deposit offered by a depository institution that requires a minimum balance, no maturity date, pays interest and allows a limited number of checks to be written each month
  8. Treasury securities
    debt securities issued by the U.S. Treasury
  9. Treasury Bills (T-Bills)
    Treasury securities with maturrities of one year or less
  10. secondary market
    a market where existing securities such as Treasury Bills can be purchased or sold
  11. credit risk (default risk)
    the risk that a borrower may not repay on a timely basis
  12. interest rate risk
    the risk that the value of an investment could decline as a result of a change in interest rates
  13. liquidity risk
    the potential loss that could occur as a result of converting an investment into cash
Card Set
Econ test 2 chpt 6
chapter 6