Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Bus 315 > Lecture 2 > Flashcards

Lecture 2 Flashcards

1
Q

What are money market instruments?

A

Short term, liquid, low risk, and have large denomination

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are treasury bills?

A
  1. Short term debt of US government
  2. Maturities of 1,3,6 and 12 months
  3. Issued on weekly auctions
  4. Sold at discount to maturity values
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Secondary axis:

A

Showcase the differences in prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are certificates of deposits?

A
  1. Time deposits with a bank
  2. GIC → Canadian equivalent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What does growth rate measure?

A

Slope

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is commercial paper?

A

Short term, unsecured debt of a company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are bankers acceptances?

A

Order to a bank by bank’s customer to pay a sum of money on a future date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are euro dollars?

A

Dollar denominated time deposits in banks outside the US, doesn’t have anything to do with europe

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why do companies do commercial paper?

A

Quick cash and make their debts payable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Quick cash and make their debts payable

A
  1. Repurchase agreements
  2. Short term loan backed by government securities or treasuries
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are fed funds

A
  1. Shorter loans between banks
  2. Trade their balances between federal reserves
  3. Federal funds = excesses balances held on federal reserves
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are yields on money market instruments?

A

Money market securities are not free of default risk except for treasury bills

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are different bond markets?

A
  1. US treasury notes and bonds
  2. Government of Canada bonds
  3. Federal Agency Debt
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are US Treasury Notes and Bonds

A
  1. Finances US federal debt, and its a large and liquid market
  2. Notes: Maturities are between one and ten years
  3. Bonds: Maturities 10 years or more
    1. Pay coupons every 6 months
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are TIPs:

A
  1. Treasuring Inflation Protected Securities
    1. Coupons are adjusted depending on CPI
    2. Gives the yield return
    3. Gives the idea of what the market expects to be
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are government of Canada bonds?

A

Maturities from 3 to 40 years, maturity is less than 3 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are federal agency debts?

A

Finances activities related to public purposes

18
Q

What are government sponsored enterprises

A

Federally chartered but privately owned corporations

19
Q

What are municipal bonds

A

Issued by state and local governments

20
Q

What are general obligation bonds

A

Backed by taxing power

21
Q

What are revenue bonds

A
  1. Backed by project revenues or by municipal agency’s operating the project
  2. Allows private companies to borrow at municipality rates
22
Q

WhaT ARE CORPORATE BONDS

A
  1. Issued by private firms and have semi annual interest payments
  2. Have a larger default risk than government securities
23
Q

What are MBS

A

First mortgages on residential properties

24
Q

What are ABS

A

Credit card receivables, auto loans and leases or home equity loans

25
Q

Why are money markets going popular again

A

Interest rates are going up

26
Q

What are common stock:

A
  1. Ownership
  2. Has residual claim - receives share of earnings after debt obligations satisfied
  3. Has limited liability
27
Q

What is a preferred stock?

A
  1. Has fixed dividends and the priority over common
  2. Doesn’t usually carry voting rights
  3. May be callable or convertible
  4. Tax treatment → not deductible from income
28
Q

What are American depository receipts?

A

Certificates traded in the US markets that represent ownerships in shares of a foreign company

29
Q

What are stock market indexes

A
  1. Measures the changes in the economy in financial markets
    1. Used for benchmarking
    2. Used to create an index portfolio
30
Q

What are construction criteria of stock market indexes?

A

Size, breadth, source of sample, computation, weighing conventions

31
Q

What is the Dow Jones Industries?

A
  1. Looks at the price weighted average
  2. Has 30 large well known industrial stocks ‘blue chips’
32
Q

What are the three types of stock market indexes

A
  1. Price weighted
  2. Market value weighted
  3. Unweighted
33
Q

What are some advantages of the SP500

A
  1. Broader sample
  2. Automatic adjustments for stock splits
34
Q

What makes S&P 500 different from Down jones

A

Calculates the weighted average of returns of each security and weights proportional to outstanding market value

35
Q

What are the disadvantages of the S&P 500

A
  1. Skew
  2. Average doesn’t represent the whole market
36
Q

What are other major US equity indexes

A
  1. Nasdaq composite
  2. Nyse Composite
  3. Wilshire 500
  4. Russell 200
37
Q

What are Canadian indexes

A
  1. S&P/TSX Composite INdex; TSX 60 and TSX Venture
  2. Market Cap - weighted
38
Q

What are international equity indexes

A
  1. Nikkei 225 (Tokyo)
  2. FTSE 100 (London)
  3. DAX (Germany)
  4. CAC 40 (France)
39
Q

What are you doing when investing in a value weighted?

A

Investing in bigger companies

40
Q
A

Bus 315 (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions