Capital Investments and Financial Markets: Terms and Definitions, Quizzes of Microeconomics

Download Capital Investments and Financial Markets: Terms and Definitions and more Quizzes Microeconomics in PDF only on Docsity! TERM 1 Interest Payments DEFINITION 1 A form of capital investment. If you buy a bond this is the payment you receive. TERM 2 Dividends DEFINITION 2 If you buy a share of stock within a corporation you receive this this type of payment. TERM 3 Capital Gains DEFINITION 3 a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price.A form of capitol investment. TERM 4 Rents DEFINITION 4 Purchasing a piece of real estate. A form of capitol investment. TERM 5 Capital Investment DEFINITION 5 The process of acquiring more capital. TERM 6 Market for Loanable Funds DEFINITION 6 Private households save, and entrust their money to financial institutions, such as banks, insurance companies, and so on. The financial institutions then make loans to businesses. TERM 7 Present Discounted Value DEFINITION 7 The max amount a person is willing to pay today, in order to recieve that payment on the future. TERM 8 The Rule of 72 DEFINITION 8 Over a fairly wide range of interest rates, the number of yrs to double your money is approximately equal to 72 divided by the interest rate (where the interest rate is expressed in percentage points). TERM 9 Net Present Discounted Value DEFINITION 9 Net PDV = PDV (revenues) - PDV (Costs) TERM 10 Usury Law DEFINITION 10 place a ceiling on the interest rates that can be charged.