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Chapter 30. Finance > Working with Words

Working with Words

WORD SELECTION

Circle the word or phrase in parentheses that best completes each sentence.

1:JKL Cleaners borrowed $8,000 from the local bank to buy new electric racks for their finished work. The $8,000 is the (principal / interest) of the loan.
2:JKL Cleaners and the bank signed a (collateral / promissory note).
3:As (obligor / obligee), JKL Cleaners owes money.
4:As (obligor / obligee), the bank will receive the loaned money back from JKL Cleaners.
5:JKL Cleaners will probably pay (collateral / interest) to the bank.
6:The bank asked JKL Cleaners to pledge its cleaning equipment as (collateral / interest).
7:Mary Case has 100 shares of IBM stock, $12,000 worth of municipal bonds, and several commercial real estate investments in her (return on investment / portfolio).
8:Madison Kelly bought $5,000 worth of stock in E. M. Industries, expecting to earn about 8 percent back. The $5,000 is Kelly's (return on investment / investment).

FIND THE MISFIT

In each group, underline the word that does not belong with the others. Then state why it doesn't belong.

1:obligor, lender, debtor, borrower
2:promissory note, agreement, contract, money
3:security, property, investment, collateral
4:lender, obligee, debtor, loan maker
5:obligors, investment, stocks, savings
6:interest, amount borrowed, amount loaned, principal
7:portfolio, return on investment, money earned, profit
8:real estate, bonds, interest, investment

USING YOUR WORDS

Use each of the following words or phrases in a sentence that demonstrates that you understand the meaning of the word or phrase.

1:promissory note
2:principal
3:rate
4:obligor
5:collateral
6:obligee
7:return on investment
8:portfolio



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