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26 Cards in this Set
- Front
- Back
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Money Market |
Very short-term, highly liquid, relatively low-risk debt instruments |
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U.S. Treasury Bills (T-Bills) |
Short-term government securities issued at a discount from face value and returning the face amount at maturity |
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Certiface of Deposit (CD) |
A bank time deposit: Interest and principal paid back on certain date |
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Commercial Paper(CP) |
Short-Term unsecured debt issued by large corporations |
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Bankers' acceptance |
An order to a bank by a customer to pay a sum of money at a future date |
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Eurodollars |
Dollar-denominated deposits at foreign banks or foreign branches of American banks |
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Repurchase Agreements (Repos) |
Short-term sales of government securities with an agreement to repurchase the securities at a higher price |
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Federal Funds |
Funds in the accounts of commercial banks at the Federal Reserve Bank |
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LIBOR(London Interbank Offer Rate) |
Lending rat among banks in the London Market |
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Treasury Notes or Bonds |
Debt obligations of the federal government with original maturities of one year or more |
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Inflation-Protected Treasury Bonds (TIPS) |
Principal amount is adjusted in proportion to increases in the CPI |
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Municipal Bond (Munis) |
Tax-exempt bonds issued by state and local government
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Equivalent Taxable Yield of Tax-Exempt Bond |
r(1-t)=rm |
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Corporate Bonds |
Long-term debt issued by private corporations typically paying semiannual coupons and returning the face value of the bond at maturity |
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Common Stocks |
Ownership shares in a publicly held corporation. Shareholders have voting rights and may receive dividends. |
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Characteristics of Common Stock |
1. Residual claim: stockholders are the last in line of all those who have a claim on assets and income of the corporation 2. Limited Liability: you lose what you invested |
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Preferred Stock |
Nonvoting shares in a corporation, usually paying a fixed stream of dividends |
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ADRs |
traded in U.S. markets that represent ownership in shares of a foreign company |
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Dow Jones Industrial Average (DJIA) |
30 large blue-chip corporations computed since 1896 Measures performance on a portfolio that holds one share of each stock so it is a price-weighted average |
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Standard & Poor's Composite 500 (S&P 500) |
500 firms Market Value-weighted index |
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Equally Weighted Indexes |
An index computed from a simple average of returns |
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Foreign Stock Indexes |
FTSE, Nikkei, DAX, Hang Seng |
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Derivative Assets |
A security with a payoff that depends on the prices of other securities |
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Call Option |
The right to buy an asset at a specified price on or before a specified expiration date |
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Put Option |
The right to sell an asset at a specified price on or before a specified expiration date |
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Futures Contract |
Obliges traders to purchase or sell an asset at an agreed-upon price at a specified future date |
