The Federal Reserve System and Monetary Policy Notes
Structure of the Fed
Basically unchanged since 1930s
Board of Governors
7 member board, appointed by the President, Senate confirmation, 14 year term
Federal Reserve District Banks
Finance Final Exam Review Terms
- Financial institutions & intermediaries
- Non-bank financial institutions
- Junk bonds
- Components of a bond
- The Efficient Market Hypothesis
- Major stock markets and rating services
- Capital Formation
- Risk/reward a
CHAPTER 6 REVIEW
The following information you must know for the test. Answer the questions. Use your
notes or the textbook.
1. What are luxury goods?
2. What is the percentage a person should save from their net income?
3. Amounts that you have already c
Minimum Wage Analysis
Paychecks and Minimum Wage
Congratulations! You just got your first job working at ShopRite bagging groceries and
collecting the carts in the parking lot. You are very excited about the megabucks you are
making and think that there i
What is a bond?
The company or government pays annual interest to the investor until a
_ is reached.
What is a maturity date?
Corporate bonds are issued by _.
Treasury bonds are issued by _.
Municipal bonds are issued by _.
Salaries and Commissions
A commission is
A salary is
Jim sells paper for the Dunder Mifflin Paper Company. His pay is based
salary plus commission. He has a base salary of $20,000, plus he makes
commission on everything he s
Answer the questions.
Suppose you own 100 shares of stock. It pays $1 per share in dividend. How much will you
receive every quarter?
2. Randall owns 250 shares of stock. The stock pays $2 per share in dividend. Each share of stock
Sammy Stocks purchased 100 shares of Husky Blue, Inc. on January 10th when the market price
of the stock was $25. Sammys stockbroker, Jonathan, charges a $50 transaction fee on all stock
purchases and sales.
1. What was the total c
Mutual Funds and Market Indexes
Mr. Sorg was born in 1965. On July 1, 1965, the S&P 500 index was valued at $89.96.
Suppose Mr. Sorgs parents bought him 100 shares of an S&P 500 index fund at this
What would they have paid for these 100 share
McDonalds Stock Simulation
In 1954, Ray Kroc mortgaged his home and invested his entire life savings to be the exclusive distributor of
a milkshake maker called Multimixer. When he heard that a hamburger stand was using eight of his mixers
at a time, he c
Savings Vs. Investing
Savings is for _.
You should have _ in savings before you start investing.
Investing is for _.
The rate of return on an investment should be _ than the rate of inflation.
Types of Investment Tools