Class 4 ch1-3

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  1. What is direct transfer?
    Business sell stocks and bonds to savers. Usually small firms
  2. Investment Banking
    Companies sell its stocks and bonds to investment banks, who in turn sell securities to savers
  3. Financial Intermediary
    gets funds from savers in exchange for securities. Intermediary uses the funds to buy and hold business securities
  4. Physical Assets VS Financial Assets
    • Physical = tangible goods
    • Financial = stocks , bonds, notes
  5. Spot VS Futures
    • Spot = goods sold at current price
    • Futures = making a bulk order now in an anticipation of increase price at a later time
  6. Money Market Vs Capital Market
    • Money market = w/in one year. Liquid debt securities
    • Capital = over a year long term debt and corporate stocs
  7. Primary vs secondary
    • Primary = buying from original owner
    • Secondary = 2nd
  8. Private vs Public
    • Private = exclusive
    • Public = NYSE
  9. Investment Banking
    • Help design securities more marketable for investors
    • Buys securities from corps
    • Sells to savers
  10. Commercial Banks
    traditional banks offering finance services for savers and borrowers
  11. Financial Services Corp
    Firms that offer a wide range of financial services including investment banking, brokerage ops., Insurance, commercial banking
  12. Credit Union
    Cheapest source of funds for members. their money is lent to other members
  13. Pension Funds
    Retirement plan, investments are in bonds, stock, mortgages, real state
  14. Life Insurance
    • take savings in annual premium.
    • invests in stocks, bonds, real state, mortgages
    • tax deferred
  15. Mutual funds
    pools investor funds to purchase financial instruments and reduce risk
  16. exchange trade funds
    purchases portfolio of stocks of a certain type
  17. Hedge funds
    similar to mutual funds. unregulated
  18. Efficient Market Hypothesis
    buy and selling, low and high
Card Set:
Class 4 ch1-3
2015-09-08 20:44:18

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