Chapter 16-2

serial bonds

A sequence of small bond issues of progressively longer maturity.

trade credit

Credit extended by suppliers for the purchase of their goods and services.

working capital management

The management of short-term (current) assets and liabilities.

securities markets

The mechanism for buying and selling securities.

transaction balances

Cash kept on hand by a firm to pay bills such as employee wages, supplies, and utilities.

secured bonds

Bonds that are backed by specific collateral that must be forfeited in the event that the issuing firm defaults.

unsecured bonds

Bonds that are not backed by specific collateral; also called debentures.

secured loans

Loans backed by collateral that the bank can claim if borrowers fail to repay them.

unsecured loans

Loans backed only by the borrower's good reputation and previous credit rating.

Treasury bills (T-bills)

Short-term debt obligations the U. S. government sells to raise money.