31. Bonds and stocks
– Issuing entity: Whether it is the state, local public organizations or enterprises, bonds can be issued; stocks can only be issued by joint-stock enterprises.
– Income stability: The interest rate of bonds has been determined before purchase, and fixed interest will be obtained upon maturity; the dividend rate of stocks is generally not determined before purchase, and dividend income depends on the profitability of the joint-stock company.
– Capital preservation ability: The principal of the bond can be recovered when it matures; the stock principal cannot be recovered once it is handed over to the company. Once the company goes bankrupt, it also depends on the liquidation status of the company’s remaining assets.
– Economic interest relationship: Bonds represent a bond to the company; stocks represent ownership of the company.

32. Deposit insurance system: If a deposit insurance system is established, when the bank that implements the system has insufficient capital turnover or goes bankrupt and cannot pay depositors’ deposits, according to the terms of the insurance contract, the insured bank can obtain compensation from the deposit insurance institution. Or obtain financial assistance, or be accepted or merged, the depositor’s deposit losses will be reduced to the smallest possible extent.

33. Credit asset securitization: It is the process of converting originally uncirculated financial assets into negotiable capital market securities. For example: Bank A lent many housing loans. After combining, A sold housing mortgage securities to the public (A sold the securities and recovered the loan from the public). When they matured, the public (investors) who purchased the securities received the loan from A. Party A receives the transferred principal and interest; Bank A receives service fees for its services to the borrower and investor.

34. Primary market: The primary market, also known as the issuance market and primary market, refers to the transaction price formed by the first sale of financial securities to the public by fund demanders. In the primary market, fund demanders sell financial securities at wholesale prices to the initial purchasers of securities, that is, securities underwriters, who then market financial securities to final buyers.

35. Secondary market: The secondary market, also known as the circulation market and the secondary market, is a market formed by the sale and circulation of issued securities among investors at market prices.

36. IPO: The initial public offering is referred to as IPO (initial public offerings), which refers to the issuance method of a joint stock company or a limited liability company to the public for the first time. A limited liability company will become a joint stock company after its IPO.

37. Hedge Fund: A hedge fund is a securities investment fund that raises funds through private placement and uses leverage financing to obtain profits by investing in publicly traded securities and financial derivatives.

38. Hedging: Hedging is a trading behavior that uses futures contracts to maintain the value of commodities in the spot market. The “hedging” mentioned here mainly means that the same producer and operator buys or sells a certain number of spot commodities in the spot market and at the same time sells or buys the same spot commodity in the futures market in a similar quantity. , but the opposite direction of futures commodities (futures contracts), in order to achieve the purpose of avoiding price risks when adverse price changes occur in the spot market.

39. Speculation: The term “speculation” is used in futures and securities trading. It refers to the trading behavior of seizing opportunities based on judgment of the market and making use of the price differences that appear in the market to buy and sell and obtain profits. Speculators can “buy short” or “sell short.” Speculators are an important part of the futures market, and “speculation” is not a derogatory term.

40. Household financial assets: Household financial assets are mainly divided into two categories: financial assets and non-financial assets. Financial assets include bank deposits, bonds, stocks, investment funds, retirement funds, life insurance, various management assets, etc. Non-financial assets include owner-occupied residences, non-owner-occupied residences, commercial assets, automobiles, durable consumer goods, gold, silver, jewelry, antiques and art, etc.