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The flashcards below were created by user
wrexshop
on FreezingBlue Flashcards.
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What is direct transfer?
Business sell stocks and bonds to savers. Usually small firms
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Investment Banking
Companies sell its stocks and bonds to investment banks, who in turn sell securities to savers
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Financial Intermediary
gets funds from savers in exchange for securities. Intermediary uses the funds to buy and hold business securities
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Physical Assets VS Financial Assets
- Physical = tangible goods
- Financial = stocks , bonds, notes
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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
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Money Market Vs Capital Market
- Money market = w/in one year. Liquid debt securities
- Capital = over a year long term debt and corporate stocs
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Primary vs secondary
- Primary = buying from original owner
- Secondary = 2nd
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Private vs Public
- Private = exclusive
- Public = NYSE
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Investment Banking
- Help design securities more marketable for investors
- Buys securities from corps
- Sells to savers
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Commercial Banks
traditional banks offering finance services for savers and borrowers
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Financial Services Corp
Firms that offer a wide range of financial services including investment banking, brokerage ops., Insurance, commercial banking
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Credit Union
Cheapest source of funds for members. their money is lent to other members
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Pension Funds
Retirement plan, investments are in bonds, stock, mortgages, real state
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Life Insurance
- take savings in annual premium.
- invests in stocks, bonds, real state, mortgages
- tax deferred
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Mutual funds
pools investor funds to purchase financial instruments and reduce risk
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exchange trade funds
purchases portfolio of stocks of a certain type
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Hedge funds
similar to mutual funds. unregulated
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Efficient Market Hypothesis
buy and selling, low and high
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