Krueger, Explorations in Economics 1e, Module 49
financial intermediary
An institution that channels money between savers and borrowers.
Debt financing
Getting money by borrowing.
Equity financing
Getting money by selling stock.
junk bond
A high-risk, high-interest-rate corporate bond.
secondary markets
A market in which investors buy and sell financial assets that have already been purchased at least once.
money market
A market in which money is lent for less than a year.
capital market
A market in which money is lent for one year or more.
primary market
A market in which new assets such as stocks and bonds are sold by their issuers.
bull market
A market trend characterized by steady growth in stock prices.
bear market
A market trend is characterized by rapidly declining stock prices.
nominal interest rate
The actual rate of interest that a saver will receive and a borrower will pay.
current yield
The annual coupon payment divided by the price.
real interest rate
The nominal interest rate minus the expected rate of inflation.
