|
|
YIELD: The rate of return on a financial asset. In some simple cases, the yield on a financial asset, like commercial paper, corporate bond, or government security, is the asset's interest rate. However, as a more general rule, the yield includes both the interest earned from an asset plus any changes in the asset's price. Suppose, for example, that a $100,000 bond has a 10 percent interest rate, such that the holder receives $10,000 interest per year. If the price of the bond increases over the course of the year from $100,000 to $105,000, then the bond's yield is greater than 10 percent. It includes the $10,000 interest plus the $5,000 bump in the price, giving a yield of 15 percent. Because bonds and similar financial assets often have fixed interest payments, their prices and subsequently yields move up and down as economic conditions change.
Visit the GLOSS*arama
|
|
|
|
|
Lesson 19: Money Creation | Unit 2: Fred Returns
|
Page: 7 of 23
|
Elizabeth needs a loan, but she doesn't want gold, she wants receipts, she wants money.Remember that: - Fred issues receipts only for deposits.
- Can he just issue receipts?Two options:
- One: Fred can loan gold from his safe, which Elizabeth can deposit for receipts.
- Two: Fred can loan Elizabeth the receipts directly. Note that:
- With both, Elizabeth ends up with receipts and Fred ends up with the same amount of gold in his safe.
- With both, receipts are not all backed by gold: The loan increases the number of receipts in circulation.Fractional-reserve banking:
- If every receipt is redeemed, then Fred is in trouble.
- But Fred knows that only a fraction of the gold is redeemed at any given time.
|
|
|
|
|
|
|
LONG-RUN TREND The pattern of potential real gross domestic product of an economy based on full employment of available resources. The long-run trend is commonly represented as a positively-sloped line in a diagram depicting business-cycle phases. This slope captures the economy's expansion in its production possibilities resulting from increases in the quantity and quality of resources.
Complete Entry | Visit the WEB*pedia |
|
|
|
The wealthy industrialist, Andrew Carnegie, was once removed from a London tram because he lacked the money needed for the fare.
|
|
|
"Plans are only good intentions unless they immediately degenerate into hard work." -- Peter Drucker, management consultant
|
|
ANOVA
Analysis of Variance
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
