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22 Cards in this Set

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