Volume Chatper 2 - The Capital Market Flashcards
What are the three elements of central importance to the sesecurities industry?
- Financial Intermediaries
- Financial Markets
- Financial Instruments
Three important characteristics of Capital
- Mobility
- Sensativity
- Environment
- Scarcity
what are favourable conditions stimulating cash settlements
- Stable Government
- economic activity that is not heaily regulated
- hospitipal investment climate
- profitable investment opportunities
What are components of country risk
- politial environment
- economic trend
- Fiscal Policy
- Monetary Policy
- Investment opportunities
- The Labour Force
What are sources of user capital
Retail Investors
Institutional Investors
Foreign Investors
What are users of Capital
Individuals
Businesses
Governements
What are the different types of Financial Instruments
Fixed Income Securities
Equity Securities
Derivatives
Managed Products
Structured Products
What three characteristics does a liquid market have
Frequent trades
Narrow price spread between bid and ask prices
small price fluctuations from trade to trade
Which Exchanges operate in Canada
- TSX
- TSX Venture
- TSX Alpha Exchange
- Montreal Exchange
- ICE NGX Canada
- Canadian Securities Exchange
- NEO Exchange
TSX
Lists equities, some debt instruments that are convertible into a listed equity, income trusts, and exchange traded funds.
TSX Venture
Lists equitites and a few debenture issues
TSX Alpha
Offers trading in securities listed on the TSX and TSX Venture
Montreal Exchange
Trades all financial and equity futures and options listed for trading in Canada
ICE NGX Canada
Provides electonic trading, central counterparty clearing, and data services to the North American natural gas and electricity markets
Canadian Securities Exchange
lists equities of emerging companies
The NEO Exchange
Provides listing services and facilitates trading in securities listed on the NEO, TSX, and TSX Venture.
Where are most bonds and debentures sold
dealer markets
what else can dealer markets be called
unlisted markets, over the counter markets.
Is the a central marketplace for dealer market transactions
no, trades are only made by means of computer systems
What is trading like in the unlisted market
is conducted in a similar manner to bond trading. Investors orders are not entered into a centralized market and made public. Investment dealers quote their own bids and offers. They hold an inventory of the securities in which they have agreed to make a market.
Explain Over the Counter derivatives market
dominated by large international financial institutions, such as banks and investment delaers that trade with corporate clients and other financial institutions. traders do not meet in person to negotiate transactions, and the market stays open 24 hours a day.
What is an attractive feature to the OTC derivative market
they can be custom designed by the buyer and the seller with special features added to the basic properties of options and forwards. they tend to be somewhat complex.
Which province requires trades in equity unlisted markets to be reported
Ontario, through the Ontario securities act. Must be reported through the web-based system of the Canadian Unlisted Board Inc.
what is an alternative trading system
Canadian financial markets also include ATS. they are electronic marketplaces that provide automated mathcing and execution of trades in both the equity and fixed-income markets.
What is an Equity Electronic Trading System
can be used with ATS to provide automated trade mathcing and execution of orders from multiple buyers and sellers.
What is a fixed-income electronic trading system
with the exception of a few debentures listed on the TSX and TSX Venture, all bond and money market securities are sold through dealer markets. These markets include:
- Can Deal
- CBID and CBID Institutional
- MarketAxess
- CanPX
