Finance 2 Flashcards
Primary Market
The market for new issues of securities. A way to raise money for demanders of funds.
Initial Public Offering
Common stock shares being sold to the public for the first time.
“Stocks being sold to the public for the first time”
Investment Bank
Firm that specializes in the sale of new securities to the public
Underwrite
The process by which investment banks purchase on issue of securities from a firm and resell it to the public
Syndicate
A group of investment banks that collectively issue a security
“Syndicate”=Combine. S=Securities
Private Placement
New securities issues are sold directly to financial institutions, bypassing the open market.
“Private School” Bypassing open market. Directly towards Financial institutes.
Secondary Markets
Market where existing securities are traded amount investors. Does not raise money for demanders of funds.
New York Stock Exchange
The major secondary market for the trading of equity securities. Securities are traded electronically and in person on the “trading floor”.
NASDAQ Stock Market
Fully electronic equity securities market. Home to a large number of technology companies.
Over-the-counter (OTC) Market
A decentralized market for securities not listed on an exchange.
Market Maker
An individual who makes a market in a stock by buying from and selling to investors.
Switch Maker and Market around. “Maker Market” by buying and selling
Dow Jones Industrial Average (DJIA)
A price-weighted index of 30 large, well-established companies that is sometimes used as a measure of stock market activity.
Price weighted 30 top companies.
Price-Weighted Index
An index that gives more important to high-priced stocks than low-price stocks.
Standard & Poor’s 500 Composite Index (S&P 500)
A capitalization-weighted index of 500 large-cap companies that is sometimes used as a measure of stock market activity.
500 Capital
Capitalization-Weighted Index
An index that gives more importance to companies with larger market capitalizations.
