Chapter 2 Flashcards
what is characteristics of capital?
Mobility, sensitivity to its environment, and scarcity.
What are components of country risks?
Political environment, economic trends, fiscal policy, monetary policy, Investment opportunities, the labour force.
What are the suppliers of capital?
Individual, non-financial domestic corporations (not significant), governments, foreign investors.
What are the users of capital?
individuals, business and governments.
what is managed products?
also called investment funds are pools of capital gathered from investors to buy securities like mutual funds, exchange-trade funds, private equity funds.
What is structured products?
financially engineered product with the characteristics of debt, equity and an investment fund like principal-protected notes, index-linked guaranteed investment certificates.
What is difference between auction market and dealer?
Aution: investment dealers act as agents, orders are channeled to a single central market where they compete against each other. Mostly trade equities and more visible
Dealer: OTC markets, consist of a network of banks and investment dealers. Negitated market and dealers act as principals. Most of bonds and debentures are sold through dealer markets and less visible
What is the characteristic of liquid exchanges?
frequent trades, narrow price spread between bid and ask prices, small price fluctuations from trade to trade.
List exchange in Canada.
Toronto stock exchange (TSX), TSX venture Exchange (list equity and few debenture), TSX Alpha Exchange (offers trading in securities listd on TSX and TSX venture exchange), Montreal exchange, ICE NGX Canada (North american natural gas and electric), Canadian Securities exchange (emerging), NEO Exchange.
What is CUB?
Canadian Unlisted Board. In Ontario, Ontario securities Act requires that trades of unlisted securities and unquoted securities need to report through web-based system of CUB.
What is ATS?
Alternative trading systems are electronic marketplaces that provide automated matching and execution of trades in both the equity and fixed-income markets.
What is the difference between ATS and traditional exchange like TSX?
ATSs are not allowed to carry all of the same functions such as cannot list securities themselves.
Name some fixed-income electronic trading systems.
Candeal (is IIROC, joint-venture of 6 largest bank offers institutional investors access to government securities and money market instrument), CBID (an ATS that offers fix-ed income market places for retail and institutional), MarketAxess (provide market data and trading platform with access to multi-dealer competitive pricing for corporate bonds and other fixed-income instruments), CanPX (display real-time bid and offer quotations and volume information).
What is debenture?
Similar to stock but secured only on the issuer’s reputation
When do they need to report to CUB?
based on purchases and sales where either (1) the person to whom the trade is confirmed is a resident of Ontario; or (2) the user’s trader or sales representative handling the trade is acting from an Ontario office.
