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52 Cards in this Set
- Front
- Back
Serves as a middle man and facilitates the issuance of securities |
Investment banks |
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3 kinds of capital transfers from borrowers to savers |
1. Direct transfer 2. Indirect transfer through investment banks 3. Ndirect transfer through financial intermediary |
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_________ are necessary for a growing economy. |
Efficient financial markets |
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Indirect transfer through investment banks is also called_____. |
Primary market transaction |
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The markets in which assets are bought or sold for "on the spot" delivery |
Spot markets |
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The markets in which participants agree today to buy or sell an asset at a future subject. |
Futures markets |
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Are markets also called intangible or real are for products such as wheat, autos, real estate computers, machinery |
Physical asset markets |
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Are the markets for short term, higly liquid debt securities. |
Money markets |
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Deals with stocks, bonds, notes and mortgages. Also deals with derivative securities |
Financial asset markets |
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The financial markets in which funds are borrowed or loaned for short term periods. |
Money markets |
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Markets for intermediable or long term debt and corporate stocks |
Capital markets |
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The financial markets for stocks and for intermediate or long term debt |
Capital markets |
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Are the markets in which corporations raise new capital |
Primary markets |
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Are the markets in which existing already outstanding securities are traded among investors |
Secondary markets |
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Markets in which corporations raise capital by issuing new securirties. |
Primary markets |
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Markets in which securities and other financial assets are traded among investors after they have been issued by corporations |
Secondary markets |
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Are organizations that operate much like hedge funds; but rather than buying some of the stock of the firm, thry buy and then manage entire firms. |
Private equity companies |
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Largest financial institution in the world |
Citigroup |
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Stocks are traded using a variety of market procedures but there are just 2 basic types: |
(1) Physical location exchanges (2) Electronic dealer-based markets |
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Who are the 2 leaders? |
New York Stock Exchange (NYSE) and the Nasdaq stock market |
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________, previously issued securities are traded in secondary markets. |
Outstanding |
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Formal organizations having tangible physical locations that conduct auction markets in designated securities. |
Physical location exchanges |
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A large collection of brokers and dealers, connected electronically by telephones and cmputers' that provides for trading in unlisted securities. |
Over-the-Counter (OTC) Markets |
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Most actve secondary market, more important one to fnancial managers |
Stock markets |
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Includes the NYSE, the American stock exchange(AMEX) and several regional stock exchanges |
Physical location exchanges |
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The _____ is actually a modifed auction market wherein people bid stocks. |
NYSE |
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Who facilitate the trading process by keeping an inventory of stocks in which they specialize. |
Specialist |
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Includes all facilities that are needed to conduct security transactions not conducted in physical location exhanges |
Dealer market |
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The difference between bid and ask prices represents the dealer's markup or profit. |
Bid-ask spread |
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Brokers and dealers who participate in the OTC market are members of a self-regulatory body known as |
National Association of Securities Dealers (NASD) |
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The computerized network used by NASD is known as the |
NASD Automatic Quotation System (Nasdaq) |
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Started as just a quotation system but it has grown to become an organized securities market with its own listing requirements |
Nasdaq |
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______ has invested in London Stock Exchange and other market makers while the ______ merged with Euronext. |
Nasdaq; NYSE |
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Companies are so small that their common stocks are not actively traded. They are owned by relatively few people usually the companies' managers |
Privately owned or closely held corporations |
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Stocks of the closely held corporations |
Closely held stocks |
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This ______ makes it difficult to compare the volume between stock markets. |
Double counting |
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Have a significant influence on the prices of individual stocks. |
Institutional investors |
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Stocks are owned in large companies by thousands of investors |
Publicly owned corporations |
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Outstanding shares of established publicly owned companies that are traded : |
Secondary market |
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The company receives no new money when sales occur in this market. |
Secondary market |
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Outstanding /used shares are for _____ markets |
Secondary |
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A corporation that is owned by a few ndividuals who are typically associated with the firm's management |
Closely held corporations/ privately owned
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Additional shares sold by established publicly owned companies: |
Primary market |
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The market for stock that is just being offered to the public is called the |
Inital public offering(IPO) market |
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Initial public offerings made by privately owned companies: |
IPO market |
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The 3 types of stock market transactions are: |
1) Outstanding shares of established publicly owned companies that are traded: Secondary market 2) Additional shares by established publicly owned companies: Primary market 3) Initial public offerings made by privately owned firms: IPO market |
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It means that the demand for shares at the offering price exceeds the # of shares issued |
Oversubcribed |
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In a ______ the actual transaction price is set at the highest price(the clearing price) that causes al of the offered shares to be sold |
Dutch auction |
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The current price of a stock |
Market price |
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Price at which the stock would sell if all investors had all knowable information about a stock |
Intrinsic value |
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Price that balances buy and sell orders at any given time |
Equilibrium price |
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Market in which prices are close to intrinsic values and stocks seem to be intelligible |
Efficient market |