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26 Cards in this Set
- Front
- Back
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What are institutional investor's paid to do?
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manage other people's money
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What do institutional investors trade?
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large volumes of securities for individuals, businesses, and governments.
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institutional investors include financial institutions such as,
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banks, life insurance companies, mutual funds, and pension funds.
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T/F Institutional investors are often more sophisticated in investment knowledge and methods.
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True
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What type of investments do young investors (growth oriented youth 20 to 45) tend to focus on?
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growth oriented and speculative vehicles like high risk common stocks, options, and futures.
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people in the middle age consolidation (45 - 60) tend to focus on what type of investment?
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higher quality securities. low risk growth and income stocks, high grade bonds, preferred stocks, convertibles, and mutual funds.
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What type of investments do people in the income oriented retirement years (60-?) generally focus on?
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low risk income stocks, mutual funds, high yielding government bonds, quality corporate bonds, bank certificates of deposit (CDs), and other short term vehicles
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What are the three types of income individuals earn?
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active income, portfolio income, passive income
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consists of everything from wages and salaries to bonuses, tips, pension income, and alimony. earned on the job and other non investment income.
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active income
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earnings generated from various types of investments. This category covers savings accounts, stocks, bonds, and mutual funds, options and futures. it consists of interest, dividends and capital gains
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portfolio income
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a special category of income, composed chiefly of income derived from real estate, limited partnerships, and other forms of tax advantage investments.
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passive income
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What are generally higher risk debt instruments?
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common stocks, options, and futures
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What are generally lower risk debt instruments?
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high grade bonds, preferred stocks, convertibles, mutual funds, government bonds, corporate bonds, CD's
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What debt instruments are virtually risk free?
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Treasury bills and series EE savings bonds
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where are short term securities with maturities less than one year bought and sold?
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money market
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where are long term securities with maturities greater than one year such as stocks and bonds bought and sold?
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capital market
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where are new issues of securities sold to the public?
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primary market
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What is the main vehicle in the primary market?
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initial public offering (IPO)
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in which market are securities traded after they have been issued?
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secondary market
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Broker markets and dealer markets are part of what type of market?
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secondary market
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the buyer and seller, are brought together to trade securities.
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broker market
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buyer and seller are not brought together directly, instead have their orders executed by dealers that make markets in the given security
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dealer market
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What are the Three Choices to Market Securities in Primary Market
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Public offering
Rights offering Private Placement |
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Favorable markets
Rising prices Investor/consumer optimism Economic growth and recovery Government stimulus |
Bull market
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Unfavorable markets
Falling prices Investor/consumer pessimism Economic slowdown Government restraint |
Bear market
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Use of nonpublic information about a company to make profitable securities transactions
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insider trading
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