Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
What do investment banks do? |
They help companies obtain funds by helping them issue stock or bonds to Investors (even IPO's). Investment Banks customers are the investors they sell to not the companies they're obtaining capital for |
|
|
Three types of Capital Allocation Transfers |
1) Direct Transfer 2) Indirect Transfer 3) Financial Intermediary |
|
|
What is the difference between Spot and Future Markets? |
1) Spot Markets are when asset is delivered within 2 to 3 days after sell. 2) Anything exceeding 3 days is future markets |
|
|
Difference between Money market and Capital Market? |
-Money Market deals with loaned funds with maturities 1 year or less - Capital Markets deal with loaned funds that have maturity dates exceeding 1 year (stock is in capital market and does not have maturity) |
|
|
Difference between primary and secondary market |
1) Primary market is when a company issues new securities to raise capital for corporation 2) Secondary market is when stock is traded among investors after they have been issued by corporation |
|
|
Difference Public vs Private Markets |
-Private Markets are non-standardized transactions between two parties (tailored and more difficult to trade than public market securities) -Public Markets Mass standardized contractual buying and selling of stock. Stock sold to public is standardized because everyone in the public isn't expected to be an expert. |
|
|
What is a common example of a mutual fund? |
401-k Retirement accounts -They can be actively or passively managed. -Actively Managed ones try to outperform SP&500 |
|
|
Characteristics of Hedge-Fund |
-Large Buy-In -Unregulated -Used to Hedge or offset risk of something else |
|
|
Characteristic of Credit Union |
Members only association where members share bond "Boeing Credit Union" |
|
|
Characteristics of Exchange Traded Funds |
Like a mutual fund except its a passive investment. Invested into SP&500 "Basket investment" |
|
|
Examples of Financial Service Corporations |
-Turbo Tax -HnR Block -Liberty Tax |
|
|
What is a Pension Fund |
Retirement Accounts funded and paid into by government organizations and corporations. usually invested into bond, real estate, and mortgages. |
|
|
What is the Efficient Market Hypothesis? |
According to the EMH, stocks always trade at their fair vale on stock exchange, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. |
|
|
What has better known Intrinsic value Small or Large Company....and why? |
Large Company because many popular and well educated analysts follow the news and trends of the companies and analyze the risk and perceived rewards |
|
|
What is a Hostile Takeover? |
A Hostile Takeover is when the Intrinsic Value of a corporation is above its stock price and competitors buy out stock and might fire management and take over |
|
|
What does Stockholder wealth maximization indicate you're trying to increase? |
Both stock value and intrinsic value. You want Intrinsic Value high as possible for the long term effect and stock price high so you can make money |
|
|
Define Behavioral Finance |
Study of human behavior related to irrational investing |
