Chapter 9.5 Flashcards
The Global Financial Community
Similarly to domestic financial markets, what do global financial markets represent and provide investors with?
Important sources of funds for borrowers and provide investors with important alternatives
Why does it make sense for Canadians to borrow and invest abroad?
- Canadian debt and equity markets represent only a small portion of the total global marketplace
- Has become easer to borrow/invest abroad in today’s global business enviro as investment barriers are relaxed
In what quarter of 2018 in particular demonstrated the importance of global markets to Canadians?
3rd quarter: Canadians had foreign investments totalling ~$5.14 trillion (i.e., all the assets in the table)
~$2,203 bil of the 2018 3rd quarter investments represented what of the Canadian foreign investments?
Investments in financial assets such as foreign stocks, bonds, and so on (i.e., it excluded the $2,083 billion in direct investments)
In Q3 of 2018, how much did foreign investments in Canadian assets exceed (i.e., the liabilities)?
Exceeded $4.49 trillion w/ over $2.2 trill of this amount being in the form of financial securities and another $1.45 trill in foreign direct investment (direct ownership of Canadian firms)
Combining Total Assets of $5.141 bill and Total Liabilities of $4.494 bill, what net investment position do we get for Q3 2018 of Canada’s International Investments?
$648 billion
Why should the magnitude of Canadian investment abroad and foreign investment in Canada come as no surprise?
In today’s financial markets, it’s easier for Canadian companies and governments to issue securities in foreign markets
Easier for Canadian investors to invest in foreign markets and for foreign companies to raise funds in Canadian markets
Why does the U.S. represent and important market for Canadians?
Because of its size and proximity
Large # of Canadian companies are listed on more than 1 stock market: primarily US markets (Nasdaq or NYSE)
The world’s money markets and bond markets are very ______ in nature, with _____ market representing the largest and most active debt markets in the world
Global, U.S.
Why is the U.S possessing the largest equity markets in the world convenient for Candians?
Convenient for Canadians who want to raise money or invest by using these markets
What is the New York Stock Exchange (NYSE)?
The world’s largest stock market
What is the market capitalization of the firms traded on the NYSE at the end of 2018?
US $20.7 trillion
How has the NYSE, like other exchanges, steadily been losing ground of its listed securities?
Losing ground to alternative trading mechanisms (ATMs)
What does ATMs in the context of trading stand for?
Alternative trading mechanisms
What is the second most important stock market in the US?
Nasdaq Stock Market, or Nasdaq
What is the Nasdaq Stock Market/Nasdaq?
2nd largest stock market in the world
What was Nasdaqs market capitalization in December 2018?
US$9.8 trillion making it the 2nd largest in the world
Which stock market has more listed companies: the NYSE or Nasdaq?
Nasdaq
Which stock market do larger firms tend to list on, the NYSE or Nasdaq?
NYSE
Why does the market capitalization of the NYSE far exceed that of Nasdaq?
Because larger firms tend to list on the NYSE
Like Canadian exchanges, what have U.S and global stock markets been doing?
Consolidating
What 2 stock markets merged in 2007 to create the first truly global securities exchange? What is it called?
NYSE and Euronext merged and created NYSE Euronext
On January 16, 2009 (Hanah’s bday ayyyy), what stock exchange was phased out after the NYSE acquired it?
The American Stock Exchange
After the American Stock Exchange was acquired and phased out, what kind of trading platform did it become for the NYSE?
Became the NYSE’s trading platform for options, closed-end funds, and exchange-traded funds (ETFs)
