Understanding Products And Their Risk 3 Flashcards
Pessimistic market sentiment characterized by a belief that a security market sector or the overall market will fall
Bearish
Optimistic market sentiment characterized by a belief that a security market sector or the overall market will rise
Bullish
A financial contract with a value that is derived from and whose performance is based on an underlying asset such as an index asset or interest rate
Derivative
A type of brokerage account in which clients pre authorize their broker to buy and sell securities on their behalf without prior consent for each individual transaction
Discretionary account
The difference between the price of the underlying security and the strike price or the option (or the price at which the option may be excercised
Intrinsic value
Collateralized mortgage obligation a derivative security backed by a bundle of GNMA FNMA and FHLMC mortgages
CMO
A price below par (a bond selling below its par value)
Discount
Investing in various securities and asset classes to minimize overall portfolio risk
Diversification
A brokerage account in which customers may use credit extended by the broker dealer to purchase securities
Margin account
The final payment date on a bond when interest and principle is repaid by the borrower
Maturity date
No commission or sale charges assessed
No load funds
A collection of stocks bonds and other securities holdings
Portfolio
A price above par a bond selling above its par value
Premium
Real estate mortgage investment contract a type of real estate trust that invests in mortgages as opposed to the actual real estate
REMIC
