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Comm 102 > Chapter 17 > Flashcards

Chapter 17 Flashcards

1
Q

money

A

anything that is acceptable as payment for goods and services

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2
Q

currency

A

bank notes and coins used as a medium of exchange

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3
Q

demand deposits

A

money kept in chequing accounts that can be withdrawn by depositors on demand

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4
Q

time deposits

A

money invested for a specific period of time

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5
Q

term deposits

A

deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand

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6
Q

open market operations

A

the purchase or sale of Canadian government securities by the Bank of Canada to stimulate or slow down the economy

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7
Q

bank rate

A

the interest rate that the Bank of Canada charges on one-day loans to financial institutions

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8
Q

target for the overnight rate

A

the signal to the major participants in the money market as to what the Bank of Canada is aiming for when participants borrow and lend one-day funds to each other

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9
Q

four pillars of the Canadian financial system

A

the four pillars of the Canadian financial system refers to banks, trust companies, insurance companies, and investment dealers

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10
Q

financial intermediation

A

the process in which financial institutions act as intermediaries between the suppliers and demanders of funds

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11
Q

chartered banks

A

profit-oriented financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services

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12
Q

trust company

A

a financial institution that conducts the same activities as a bank but can also administer estates, trusts, pension plans, and agency contracts

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13
Q

credit unions and caisses populaires

A

not-for-profit, member-owned financial cooperatives

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14
Q

pension funds

A

large pools of money set aside by corporations, unions, and governments for later using in paying retirement benefits to their employees or members

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15
Q

Canada Deposit Insurance Corporation (CDIC)

A

the Canada Deposit Insurance Corporation (CDIC) is a federal Crown Corporation created in 1967 to provide deposit insurance and contribute to the stability of Canada’s financial system

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16
Q

securities

A

investment certificates issued by corporations or governments that represent either equity or debt

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17
Q

bonds

A

securities that represent a long-term debt obligation (liabilities) issued by corporations or governments

18
Q

interest (coupon rate)

A

a fixed amount of money paid by the issuer of a bond to the bondholder on a regular schedule, typically every six months; stated as the coupon rate

19
Q

principal (par value)

A

the amount borrowed by the issuer of a bond; also called the par value

20
Q

high-yield (junk) bonds

A

high-risk, high-return bonds

21
Q

secured bonds

A

corporate bonds for which specific assets have been pledged as collateral

22
Q

mortgage bonds

A

corporate bonds that are secured by property, such as land, equipment, or buildings

23
Q

debentures

A

unsecured bonds that are backed only by the reputation of the issuer and its promise to pay the principal and interest when due

24
Q

convertible bonds

A

corporate bonds that are issues with an option that allows the bondholder to convert them into common shares

25
Q

bond ratings

A

letter grades assigned to bond issues to indicate their quality, or level of risk; assigned by rating agencies such as Moody’s and Standard & Poor’s (S&P)

26
Q

mutual fund

A

a financial service company that pools its investors’ funds to buy a selection of securities that meet its stated investment goals

27
Q

exchange-traded fund (ETF)

A

a basket of marketable securities in a category, such as an industry sector, an investment objective, or a geographical area, or that track an index. ETFs are similar to mutual funds but trade like shares

28
Q

futures contracts

A

legally binding obligations to buy or sell specified quantities of commodities or financial instruments at an agreed-on price at a future date

29
Q

options

A

contracts that entitle holders to buy or sell specified quantities of common shares or other financial instruments at a set price during a specified time

30
Q

institutional investors

A

investment professionals who are paid to manage other peoples’ money

31
Q

investment bankers

A

companies that act as intermediaries, buying securities from corporations and governments and reselling them to the public

32
Q

underwriting

A

the process of buying securities from corporations and governments and reselling them to the public with the aim of reselling them at a higher price; the main activity of investment bankers

33
Q

stockbroker

A

a person who is licensed to buy and sell securities on behalf of clients

34
Q

primary market

A

the securities market where new securities are sold to the public, usually with the help of investment bankers

35
Q

secondary market

A

the securities market where old (already issued) securities are bought and sold, or traded, among investors

36
Q

broker markets or organized stock exchanges

A

organizations on whose premises securities are resold by using an auction-style trading system

37
Q

dealer markets

A

securities markets where buy and sell orders are executed through dealers, or “market makers” linked by telecommunications networks

38
Q

National Association of Securities Dealers Automated Quotation (NASDAQ) system

A

the first electronic-based stock market and the fastest-growing part of the stock market

39
Q

over-the-counter (OTC) market

A

a sophisticated telecommunications network that links dealers and enables them to trade securities

40
Q

bull markets

A

markets in which securities prices are rising

41
Q

bear markets

A

markets in which securities prices are falling

Comm 102 (17 decks)

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