Chapter 1- Overview of Market Participants and Market Structure Flashcards
____ used by corporations
* Represents ownership
Equity
_____ (i.e., notes and bonds)
* Represents an issuer’s promise to pay
Debt
A
B
C
Agency
Broker
Commission
P
D
M
Principal
Dealer
Markup/markdown
___ represents a client’s selling (liquidation) price
- This is the price at which the MM will buy
Bid
____ or offer represents a client’s purchase price
- This is the price at which the MM will sell
Ask
- Listed securities traded OTC
- Trades included in NYSE volume totals
Third Market
- Provides liquidity for large institutional investors and high-frequency traders
- Quotes are not disseminated to the public
- Limits impact on the market
Dark Pools
To be considered an accredited investor, an individual must have a net worth of _________________ or annual
income of $_______________.
$1,000,000; $200,000
A qualified institutional buyer cannot be a ______________________ and must own and invest a minimum of
___________________.
natural person; $100 million
An issuer may hire an _________________ to assist in selling its securities publicly to raise capital.
underwriter
The _______________ market is where issuers raise money by selling securities to the public.
primary
- The _________________ market is where the trading of existing securities between investors occurs.
secondary
- ________________ is considered a registered exchange with an unlimited number of market makers.
NASDAQ
- ______________________ stand ready to buy or sell securities at their quoted prices, while _______________execute trades for the firm or the firm’s clients.
market makers; traders
- A transaction executed directly between two institutions is considered a _______________ market trade.
fourth
The ___ ___ must maintain all client information for a fully disclosed account
clearing firm
The ____ ___ ___ only works with broker-dealers
Options Clearing Corporation
THE BUYER FOR ALL SELLERS AND
THE SELLER FOR ALL BUYERS
OCC
TRADES FROM MULTIPLE FIRMS CLEAR AND SETTLE THROUGH ONE FIRM
prime broker
CLEARING FIRM IS RESPONSIBLE
FOR INDIVIDUAL CLIENT INFORMATION
fully disclosed account
INTRODUCING FIRM IS RESPONSIBLE FOR
INDIVIDUAL CLIENT INFORMATION
omnibus account
