key concepts week 12-15

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lsantiago29
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key concepts week 12-15
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2012-12-06 01:35:05
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key concepts week 12-15
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  1. global commons
    a shared resource that people use collectively
  2. sustainable development
    development that meets the needs of the present without compromising the ability of future generations to meet their own needs
  3. threats to the ecosystem
    water resources, fossil fuels and arable land(farmable land)
  4. Chlorofluorocarbons (CFCs)
    reacts with and destroys the ozone layer.
  5. global climate change/warming
    -greenhouse effect - CO2 & other gases in atmosphere prevent heat from escaping into space.

    -the gradual warming of the earth's climate, believed by most scientists to be caused by an increase in carbon dioxide and other trace gases in the earth's atmosphere resulting from human activity, mainly the burning of fossil fuels.
  6. biodiversity
    the number and variety of species and the range of their genetic makeup
  7. World Business Concil for Sustainable Development (WBCSD)
    A group of companies from several nations whose goal is to encourage high standards of environmental management and to promote cooperation among businesses, governments, and other organizations concerned with sustainable development.
  8. tort reform (for shareholder lawsuits)
    changes in the law that make it harder for an injured party to sue
  9. conflict of interest
    occurs when an individual's or organization's loyalty is divided between his own selfish interests and the interest of another who depends on his judgment
  10. corporate scandals
    a disgraceful or dishonorable event
  11. stock options
    a form of compensation. options represent the right ( but not obligation) to buy a company's stock at a set price for a certain  period of time. the opetion becomes valuable to its holder when, and if, the stock price rises above this amount.
  12. financial accounting standards board (FASB)
  13. securities industry
    • serves:
    • -retail customers (individuals/institutions that want to buy/sell stocks/bonds)
    • -corporate customers (raise capital by issuing and selling their own stocks and bonds)
  14. retail customers vs. corporate customers
    • -individuals/institutions that want to buy/sell stocks/bonds
    • -raise capital by issuing and selling their own stocks and bonds
  15. investment banking
    the sale of stock and bonds FOR corporation.
  16. enron
    -largest business failure in US history
  17. gas bank
    buys energy a year in advance @ x price and then sells energy a year in advance @ x price leaving room for profit.
  18. special purpose entity (SPE)
    • financial structure used to shift assets/liabilities off a companies bookes.
    • only legal if they are at least partly owned (3% min) and controlled by an independent party(someone outside the company)
  19. Sarbanes-Oxley Act
    • -the most important revision of securities law since the 1930s. it was a direct result of Enron.
    • -a US law passed in 2002 that greatly expanded the powers of the SEC to regulate information disclosure in the financial markets and the accountability of an organization's senior leadership regarding the accuracy of this disclosure.
  20. Chinese Wall
    a Wall Street expression used to describe the strict separation of different lines of business in one company, eg. retail brokerage services and investment banking to restrict the flow of information.
  21. commercial banking
    rely mainly on checking and savings accounts as sources of funds for loans to businesses and individuals, eg. BofA, Wells Fargo
  22. Glass-Steagall Act of 1933
    • -mandated separation of commercial and investment banking.
    • -allowed commercial banks to continue to underwrite US government securities and minicipal general obligation bonds, but they were prohibited from underwriting coporated stocks and bonds
    • -repealed by Congress in 1999, because of strong political pressure from both commercial and investment bacnks that saw an advantage in working together.
  23. Broad banking
    the repeal of GS made possible the emergence of _______, or "super banks," that provide both commercial and investment banking services, eg. merger of Citibank (commercial bank) and Salomon Smith Barney (investment bank) to form Citigroup (super bank)

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