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31 Cards in this Set
- Front
- Back
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wealth
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the sum of current income and the present value of future income
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Stocks and bonds would be classified as
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financial assets
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investments include
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financial and real assets that are marketable or non-marketable
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defined-benefit plans
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retirement plans that guarantee retirees a set amount of money each month
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investment bankers
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The investment professionals that arrange the sale of new securities
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Another name for stockbrokers is:
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registered representatives
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portfolio managers
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Investment professionals whose jobs may depend on their performance relative to the market
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One reason for the declining importance of pension funds is the:
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large number of conversions into self-directed plans
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registered investor advisors
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most financial advisors are registered with the Securities and Exchange Commission as this
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A Chartered Financial Analyst designation is
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a professional designation awarded for meeting recognized standards of conduct and competency
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Underlying all investments is the tradeoff between
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expected return and risk
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Portfolio management
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an investment area that is heavily tied to work using mathematical and statistical models
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Most investors are risk averse which means
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they will assume more risk only if they are compensated by higher expected return
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U.S. Treasury bills
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considered a risk-free investment
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Security analysis is most concerned with:
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valuation and analysis of individual securities
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the slope of the ex ante risk-return tradeoff
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slopes upward
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International investing
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can reduce risk due to increased diversification
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Investment decision making traditionally consists of these two steps
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security analysis and portfolio management
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The United States accounts for roughly______percent of stock market capitalization worldwide
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50%
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Regulation FD applies to disclosure between:
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public companies and investment professionals
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In 2003, The SEC charged Martha Stewart with
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obstruction of justice
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The rise of the Internet has
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significantly democratized the flow of investment information
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what are advantages institutional investors enjoy over individual investors?
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- They can trade in the aftermarket
-They may receive information from public companies prior to individual investors *** They CAN NOT exploit spinoffs better than individual investors |
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Regulation FD
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prohibits companies from disclosing material, nonpublic information to investment professionals unless the company simultaneously publicly discloses the information
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Investors should be concerned with international investing for the following reasons
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-Large amount of capital flows from abroad into domestic markets.
-Rates of return on foreign securities may be larger than on domestic securities. ***Foreign companies are NOT taking over many domestic industries, such as banking |
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401(k) plans and IRAs
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are self-directed retirement plans (defined contribution plans)
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Risk
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the chance that the actual return on an investment will be different from the expected return.
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expected return
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the anticipated return expected by investors over some future holding period.
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Many Wall Street jobs tend to be _________ in nature
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cyclical
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Investors enjoyed the best 5 consecutive years in the stock market history over the period
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1995-1999
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Investors unwilling to assume risk should be satisfied with the
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risk-free rate of return
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