Chapter 2 Flashcards
Investment Bank Definition
An organization that underwrites and distributes new investment securities and helps businesses obtain financing.
Ex. Morgan Stanley and Goldman
Sachs
Investment Bank Purpose
Help Businesses raise capital
Commercial Bank Definition
The traditional department store of finance serving a variety of savers and borrowers.
Ex. Bank of America, Citibank, Wells Fargo, and
JPMorgan Chase,
Commercial Bank Purpose
They’re responsible for managing checking and savings accounts for both businesses and people.
Mutual Fund Definition
Organizations that pool investor funds to purchase financial instruments and thus reduce risks through diversification.
Mutual Fund Purpose
For investors to invest in securities, such as stocks & bonds.
Venture Capital Firm Definition
They invest in companies in exchange for equity in the companies they invest in.
Venture Capital Firm Purpose
To provide money to help early stage and emerging companies
NYSE Definition & Purpose
New York Stock Exchange - physical location market where people can go buy, sell and trade stocks.
NASDAQ Definition & Purpose
National Association of Securities Dealers Automated Quotations - electronic dealer market.
NYSE vs NASDAQ
NYSE - physical, NASDAQ - electronic
IPO Definition
Initial Public Offering - The market for stocks of companies that are in the process of going public.
Primary Market Definition
Markets in which corporations raise capital by issuing new securities.
- Issuing Stocks
Secondary Market Definition
Markets in which securities and other financial assets are traded among investors after they have been issued by corporations.
- Previously Issued Stock
