Exam 1 - Chapter 3 - [Slides] Flashcards
Primary market
Primary market is where the new issues are traded
Seasoned offering
New shares with having new shares
What is a file called if its approved by the SEC
Prospectus
What is a file called when it’s not approved by the SEC
Red herring
Standby underwriting
Issues are shared to the stockholders first since they have preemptive rights and then to the investment bankers
Shelf Registration
SEC Rule 415: Allows firms to register securities and gradually sell them to the public for two years
Private placements
Firm uses underwriter to sell securities to a small group of institutional or wealth investors
- cheaper than public offerings
- private placements not traded in secondary markets
What is flotation cost?
- look up he didnt talk about it
Specialist
Created a market by buying the highest bid and ask price
(Look up)
( more in the book notecards regarding this definition)
Do you buy at bid or ask price?
Ask price
What are the 2 ways to place an order
- Market order
2. Price-contingent order
What is a market order
Executed immediately at the current market price
What is a price-contingent order?
Limit, stop loss order
Stop loss order
The buyer has to buy
What is the largest over the counter
NASDAQ
‘What is the largest exchange in the world
New York stock exchange
Can large orders be negotiated through brokers and dealers
Yes
______: Electronic order-routing system: Skip Broker
SuperDot
______: fully automated execution for small orders: Skip specialist
≈
DirectPlus
_______: Handle large orders and maintain orderly trading
Specialist
What did the New York Stock Exchange used to be?
Auction
What did the NASDAQ used to be?
Dealer market with a price quotation system
What does ECN stand for
Electronic Communication Network
What is ECN
Private computer networks that directly link buyers with sellers for automated order execution
