chp 16 Flashcards
Securities
Financial instruments that represent the obligations of the issuers to provide the purchasers with the expected stated returns on the funds invested or loaned
Securities
Financial instruments that represent the obligations of the issuers to provide the purchasers with the expected stated returns on the funds invested or loaned
money market instruments
Short-term debt securities issued by corporations, financial institutions such as
banks, and governments.
bonds
by selling bonds, the seller obtains long-term debt capital. bold by the Canadian government, municipalities nd corporation
quality rating for bonds
rate corporate
and municipal bonds with regard to risk.
Higher-risk bonds must pay higher interest to
attract investors
shares
corporations generate equity capital when they sell stock and when stockholders actually own a piece of the corporation
preferred shares
in addition to common shares a few companies also issue preferred shares holders of preferred shares receive preference in the payment of dividends
convertible securities
companies may issue bonds or preferred shares that include a conversion feature, such bonds or shares are called convertible securities. this feature gives the bondholders or holders of preferred shares the right to exchange the bond or preferred shares for a fixed number of common shares
primary market
Markets in which new issues of securities are
sold to the public for the first time
The secondary market
These markets include the Toronto Stock
Exchange (TSX), the New York Stock Exchange
(NYSE), the American Stock Exchange (AMEX),
NASDAQ, and regional and foreign stock
exchanges. In these secondary markets,
securities are traded between investors
he Toronto Stock Exchange
Canada’s largest stock exchange. For a
company’s shares to be traded on the TSX, the
firm must apply for a listing and meet certain
listing requirements. The firm must continue to
meet requirements each year to remain listed
on the TSX
the New York Stock Exchange
The NYSE or “Big Board” is the largest
secondary market in the world. It is where
most of the largest, best-known U.S.
companies’ stocks are traded. Trading involves
face-to-face bidding between seated traders at
posts on the exchange floor
NASDAQ
it is a computerized communications
network where buy and sell orders are
executed electronically
ECNs and the future of stock
Electronic communications networks,
sometimes called
markets the fourth market, is where buyers and sellers
meet in a virtual stock market and trade
directly with one another
