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21 Cards in this Set
- Front
- Back
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process by which funds are transferred from those having excess funds (savers) to those having needed additional funds (users)
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Financial system
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financial instruments such as stocks and bonds
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Securities
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ownership claims in corporations
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Common stock
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market in which securities are bought and sold
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Financial market
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financial market in which new security issues are first sold
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Primary market
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financial market in which already issued securities are traded between investors
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Secondary market
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market in which common stocks are traded, such as the New York Stock Exchange
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Stock market (exchange)
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intermediately between savers and borrowers, collecting funds from savers and then lending the funds to individuals, businesses and governments
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Financial institution
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government agency that insures deposits at commercial and saving banks
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Federal Deposit Insurance Corporation (FDIC)
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the U.S. central bank
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Feral Reserve System (Fed)
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use of material nonpublic information to make investment profits
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Insider Trading
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planning, obtaining and managing the company’s funds to accomplish it objectives as effectively and efficiently as possible
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Finance
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executive who develops and implements the firm’s financial plan and determines the most appropriate sources and uses of funds
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Financial Manager
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process of maximizing the wealth of the firm’s shareholders by striking the optimal balance between risk and return
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Risk return Trade off
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document that specifies the funds needed by a firm for a period of time the timing of inflows and outflows and the most appropriate sources and uses of funds
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Financial Plan
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Mix of a Firm’s Debt and equity capital
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Capital Structure
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increasing the rate of return on funds invested by borrowing funds
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Leverage
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firm that raises money from wealthy individuals and institutional investors and invests the funds in promising businesses
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Venture Capitalist
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offer made by a firm to the target firm’s shareholder
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Tender offer
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transaction in which public shareholders are bought out and the firm reverts to private status
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Leveraged Buyout (LBO)
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sale of assets by a firm
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Divestiture
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