Chapter 4/5 Flashcards
Bid and Ask prices
Prices quoted by market value at which they are willing to buy and sell securities
Spread
Difference between the bid and ask price
Market Order
Order to buy or sell a security at the best current price
Margin
Investors equity in a security position
Long Position
Purchase of securities in anticipation of a price increase
Short Position
Sale of borrowed securities in anticipation of price decrease
Monetary Policy
Management of the money supply for the purpose of maintaining stable prices
Board of Governors
Controlling body of the FED whose members are appointed by the President
Federal Open Market Committee
Part of the Federal Reserve that establishes and executes monetary policy
What are the 3 tools of Monetary Policy
- Reserve Requirement
- Discount Rate
- Open Market Operations
Open Market Operations
Most important tool; Buying and selling of US treasury securities by the FED
What impacts the yield curve?
- The FED
- Investors
Ticker symbol for Delta
DAL
What is the formula for the percentage return or Holding period return?
new-old/old x 100
How many analysts cover Delta
19
Key takeaways from the State of the Union
- The Wall will be see through steel structure
- Trump will meet with Kim Jong Un for 2nd time
- Lowering the cost of prescription drugs
True/False: When an individual buys a stock from a secondary market, the firm receives the sales proceeds
False
T/F: An investment banker specializes in corporate loans
False
T/F: In an underwriting, the firm selling the securities forms a syndicate
False
T/F: A major function of the NYSE is to raise money for firms
False
T/F: The price of a new issue is established through the registration process with the SEC
False
Which of the following is not part of the underwriting process
- the prospectus
- the FED
- the SEC
- the syndicate
The FED
What does the Securities Investor Protection Corporation protect individuals from
Brokerage firm failures
T/F: the larger the margin requirement, the greater the proportion of a stock purchase the investor may borrow
False
T/F: Securities markets are often inefficient; so investors can anticipate beating the market over a period of time
False
