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22 Cards in this Set
- Front
- Back
Assets used to produce goods and services.
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real assets
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Claims on real assets or the income generated by them.
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financial assets
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A type of financial asset that pays a specified cash flow over a specific period.
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fixed-income securities
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An ownership in a corporation.
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equity
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Securities providing payoffs that depend on the values of other assets.
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derivative securities
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Conflicts of interest between managers and stockholders.
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agency problem
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Allocation of an investment portfolio across broad asset classes.
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asset allocation
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Choice of specific securities within each asset class.
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security selection
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Analysis of the value of securities.
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security analysis
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Assets with higher expected returns entail greater risk.
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risk-return trade-off
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Buying and holding a diversified portfolio without attempting to identify mispriced securities.
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passive management
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Attempting to identify mispriced securities or to forecast broad market trends.
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active management
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Institutions that 'connect' borrowers and lenders by accepting funds from lenders and loaning funds to borrowers.
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financial intermediaries
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Firms managing funds for investors.
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investment companies
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Firms specializing in the sale of new securities to the public, typically by underwriting the issue.
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investment bankers
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A market in which new issues of securities are offered to the public.
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primary market
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Already existing securities are traded among investors.
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secondary market
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Tendency toward a worldwide investment environment, and the integration of national capital markets.
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globalization
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Pools of loans (such as mortgage loans) sold in one package. Owners receive all of the principle and interest made by the borrowers.
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pass-through securities
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Pooling loans into standardized securities backed by those loans, which can be traded like any other security.
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securitization
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Creation of new securities either by combining primative and derivative securities into one composite hybrid or by separating returns on an asset into classes.
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bundling/unbundling
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The process of creating and designing securities with custom-tailored characteristics.
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financial engineering
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