Financial Analysis Flashcards
Finance companies raise funds by doing two things?
Selling securities or borrowing funds from commercial banks
What is the Fed’s most important function?
money and credit regulation (monetary policy)
the interest ‘’rate’’ at which Fed Reserve banks make short term loans to member banks (note: the answer is a term and not a percentage)
Discount rate
The technique of controlling money supply growth rate by buying or selling US treasury securities
Open market operations
Most used tool by the federal reserve to regulate the growth in the money supply
Open market operations
Buying and selling government securities to increase or decrease bank reserves
Open market operations
This group has voting rights and a residual claim on the company’s assets
Common stockholders
This represents ownership (share) in corporations
Common stock
A market in which securities are issued and traded
Financial market
These financial instiutions invest a large portion of their funds in stocks, bonds and real estate
Nondepository institutions
intermediary that raises money by selling shares to investors (hint: type of fund)
Mutual fund
They monitor funds, produce financial reports, cash flow statements and profit forecasts. They also arrange debt financing
Financial managers
Two types of short term bank loans
Lines of credit and revolving credit agreements
Examples of long term financing
Commercial bank loans, bonds, selling stocks
Major sources of funds for corporations
Bonds and stocks
