CSC Chapter 2 Flashcards
Identify the role of capital investment in the economy
Creating growth
Non-financial domestic corporations are sources of capital. Identify what role these corporations play in the capital markets
Not Significant providers of permanent funds.
Identify the typical role of foreign investors in Canadian Capital markets
Direct investment in Canadian Industries
The federal government finances expendatures using
T-bills and marketable bonds
Business may issue
preferred and common shares
individuals may use capital for
mortgage
municipal governments may issue
instalment debentures
Auction market or Dealer market: Bond and debenture markets
Dealer
Auction market or dealer market: TSX, ME, TSX Venture
Auction
Auction market or dealer market: Canadian Unlisted Board
Dealer
Auction Market or Dealer Market: Transactions between principals (market makers)
Dealer
Auction Market or Dealer Market: Major stock markets in Canada
Auction
Auction Market or Dealer Market: Network of dealers trading with each other over telephones or computers
Dealer
Auction Market or Dealer Market: less regulation for companies traded on this market
Dealer
Auction Market or Dealer Market: Higher dollar volume of trading
Dealer
Auction Market or Dealer Market: No listing requirements for companies trading on this marker
Dealer
Auction Market or Dealer Market: Transactions are between brokers acting as agents for buyers and sellers
Auction
Auction Market or Dealer Market: Listing requirements to trade on this market
Auction
Identify a characteristic of capital
Mobility
Identify the transaction that takes place in the secondary market
Resale of previously issued securities
Identify a difference between auction and dealer markets
Prices are publicly visible in the auction market but not in the dealer market
Nicolae is considering selling his common shares of DEF Corp. Identify the price Nicolae would most likely receive if he were to enter an order to sell his shares
Bid Price
What is the exchange in Canada that deals exclusively with financial futures and options
The Montreal Exchange
Choose the system that the Ontario Securities Commission requires firms to use to report unlisted trades in Ontario
Canadian Unlisted Board
Identify the role that the Canadian Securities Exchange (CSE) plays in the Canadian Market
Market for emerging companies
Identify the security that has its value based on an underlying instrument
Derivatives
What is the electronic fixed-income trading system that operates a retail and an institutional fixed-income marketplace
CBID/CBID Institutional
Gareth asks his investment advisor to purchase $50,000 in a new corporate bonds that are being issued to raise funds to build a new processing facility. What is the term that would refer to this type of capital investment
Indirect investment
Identify a characteristic of dealer markets
Primary market for bonds and debentures
The current bid price for ABC Inc is $25.75 and the ask price is $25.87, with last trade at $25.77. Calculate the spread.
Bid - ask = spread so $0.12
Identify a characteristic of a liquid market
Narrow price spreads in bid/ask prices
XYZ is a producer of technologically advanced experimental electronic devices that has recently experienced rapid growth. Projections are that growth will continue but the market is uncertain at present. Determine the exchange XYZ’s investment dealer could recommend for listing XYZ’s initial public offering.
Canadian Securities Exchange (CSE)
Identify the alternative trading system where an investment dealer can locate real time bid and offer quotations from a range of dealers for government of Canada bonds and treasury bills
CanPX
