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FINC 341 Guyton > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Money Markets vs. Capital Markets

A

Money Markets

  • short-term
  • high liquid

Capital Markets

  • long-term
  • debt securites
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2
Q

What is an example of the largest Capital Market?

A

New York Stock Exchange NYSE

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3
Q

2 stock exchanges that have a physical location?

A

New York Stock Exchange (NYSE)

American Stock Exchange (AMEX)

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4
Q

NASDAQ

A
  • no physical location
  • National Association of Securities Dealers Automated Quotation
  • is a network of computers
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5
Q

When did the AMEX and the NASDAQ merge and split?

A

merged in 1998

split in 2005

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6
Q

Expectations Theory

A
  • if inflation is expected to rise, then Yield curve goes up

- if inflation is expected to go down, then Yield Curve goes down

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7
Q

Maturity Risk Theory

A

Says as the maturity date increases there is an upward push on the yield curve due to the risk

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8
Q

Technological advances in computers and telecommunications, along with the globalization of banking and commerce has led to what?

A
  • Deregulation

- increased competition through the world

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9
Q

How does large amounts of capital moving around the world is response to changes in interest rates/exchange rates affect local economies?

A

It disrupts them

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10
Q

NOWC

A

-Net Operating Working Capital

CA - ( AIP + Accurals)

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11
Q

NOPAT

A

Net Operating Profit after tax

EBIT(1-T)

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12
Q

Black Knight

A
  • buys majority of IPO of company
  • company just coming to market
  • tries to gain control of company
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13
Q

White Knight

A
  • Company that buys another company

- to prevent hostile takeover from third-party(bad) company

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14
Q

If U.S. interest rates are High, what will foreign people do? What will it do to the purchasing power of the U.S. dollar?

A
  • Foreign people will invest in U.S.

- Purchasing power goes up

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15
Q

If inflation increases, what will this do to the interest rate?

A

Interest rate will increase

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16
Q

Who is responsible for a firm’s strategic decisions?

A

Chairmen of the Board

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17
Q

Who is responsible for a firm’s actual operations, such as buying/selling a firm’s products?

A

Chief Operations Officer (COO)f

18
Q

What is the Compensation Committee?

A
  • sets compensation packages for senior officers

- made up 3 non-employee people

19
Q

When can Mutual Funds be traded during the day? When can ETFs be traded?

A

Mutual Funds
-only traded at end of day
ETFs
-can be traded like a stock

20
Q

Financial Intermediaries

A
  • create new products for investors

- credit unions, JP Morgan, Fidelity, Commercial banks

21
Q

Which is more regulated, Hedgefunds or Mutual Funds?

A

Mutual Funds

22
Q

How many seats does the NYSE have?
Dimensions of window?
Dimensions of skylight?

A

1366 seats
96 by 50ft WINDOW
30 by 30 SKYLIGHT

23
Q

Date NYSE was created?

A

May 17, 1792

24
Q

How did people first meet up to trade stocks with NYSE?

A

Around a Buttonwood/Sicklemore tree

25
Q

AMEX merged with ___ in 2008. However, they did not integrate until into ___ until ___

A

Merged with Euronext in 2008

Integrated into NYSE in 2009

26
Q

Year that NASDAQ was created

A

1971

27
Q

If EVA is positive, what does that mean about the ROE

A

ROE exceeds the Cost of Equity

28
Q

Who built the NYSE window and in what year?

A

George Post 1903

29
Q

Efficient Markets Hypothesis

A
  • says stocks are always in equilibrium

- impossible for investor to consistently beat the market

30
Q

EVA

A
  • economic value added
  • used to determine managerial compensation
  • good correlation of stock price
  • good measure to shareholder value
31
Q

Europe’s dollar has increased from $1.09 to $1.24.

How does this affect the U.S.

A

Means U.S. is not buying as much stuff from Europe

32
Q

___ who works for Goldman Sachs, went on CNBC and asked how computer stocks were valued

A

Abby Joseph Cohen

33
Q

What is the average PE of the S and P500

A

15.5

34
Q

What was the date of NASDAQ’s peak? What was it’s value?

A

3/10/2000

5100

35
Q

NASDAQ hit a peak of 5100 and then went down to ___

A

1200

36
Q

The Federal deficit was ___ in 2006 and ___ in 2018.

A

762Billion in 2006

800 Billion in 2018

37
Q

Since the economic crisis of 2008, how many quantitative easing programs has the government conducted? When did the last on end

A

3 programs

October 2014

38
Q

NASDAQ acquired the ___ and 25% of the ___

A

Philadelphia Stock Exchange

25% of London Stock exchange

39
Q

How many stocks does the Dow Jones Industrial average

A

30

40
Q

Dow Jones and the S and P500 hit all time highs in ___

A

Spring of 2016

FINC 341 Guyton (4 decks)

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