financial markets Flashcards
liquidity
the ease with which an asset can be converted into cash. cash is the most liquid of all assets
financial markets
markets where financial securities, such as stocks and bonds, are bought and sold. buyers and sellers come together to exchange trade services and assets that are monetary in nature
nominal value
how much the bond is available for at the issue
coupon
the stated interest payment made on a bond
yield
the annual rate of return on a bond if the bond were held to maturity. {coupon / market price * 100}
maturity date
the date when a bond will come due
near monies
certain highly liquid financial assets that do not function directly or fully as a medium of exchange but can be readily converted into currency or checkable deposits
financial assets
assets not easy to turn into cash eg bonds
narrow money supply
the amount of notes (currency) and coins in circulation in an economy plus balances in checkable bank deposits, known as Mo
broad money supply
narrow money plus near monies, sometimes called M4
money in current accounts
electronic money deposited in banks/building societies by people
the money market
short term borrowing/lending, treasury/commercial bills, inter-bank lending (LIBOR). banks lend surplus cash reserves to each other every day
the capital market
longer term debt and equity instruments are traded (financing for individuals/businesses)
the forex market
trading different currencies, mostly speculative rather than for international trade purposes
equity
share of a company
treasury bills
short-term government securities issued at a discount from face value and returning the face amount at maturity