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CSC Volume 1 > Volume Chatper 2 - The Capital Market > Flashcards

Volume Chatper 2 - The Capital Market Flashcards

1
Q

What are the three elements of central importance to the sesecurities industry?

A
  • Financial Intermediaries
  • Financial Markets
  • Financial Instruments
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2
Q

Three important characteristics of Capital

A
  • Mobility
  • Sensativity
  • Environment
  • Scarcity
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3
Q

what are favourable conditions stimulating cash settlements

A
  • Stable Government
  • economic activity that is not heaily regulated
  • hospitipal investment climate
  • profitable investment opportunities
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4
Q

What are components of country risk

A
  • politial environment
  • economic trend
  • Fiscal Policy
  • Monetary Policy
  • Investment opportunities
  • The Labour Force
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5
Q

What are sources of user capital

A

Retail Investors
Institutional Investors
Foreign Investors

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6
Q

What are users of Capital

A

Individuals
Businesses
Governements

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7
Q

What are the different types of Financial Instruments

A

Fixed Income Securities
Equity Securities
Derivatives
Managed Products
Structured Products

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8
Q

What three characteristics does a liquid market have

A

Frequent trades
Narrow price spread between bid and ask prices
small price fluctuations from trade to trade

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9
Q

Which Exchanges operate in Canada

A
  1. TSX
  2. TSX Venture
  3. TSX Alpha Exchange
  4. Montreal Exchange
  5. ICE NGX Canada
  6. Canadian Securities Exchange
  7. NEO Exchange
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10
Q

TSX

A

Lists equities, some debt instruments that are convertible into a listed equity, income trusts, and exchange traded funds.

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11
Q

TSX Venture

A

Lists equitites and a few debenture issues

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12
Q

TSX Alpha

A

Offers trading in securities listed on the TSX and TSX Venture

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13
Q

Montreal Exchange

A

Trades all financial and equity futures and options listed for trading in Canada

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14
Q

ICE NGX Canada

A

Provides electonic trading, central counterparty clearing, and data services to the North American natural gas and electricity markets

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15
Q

Canadian Securities Exchange

A

lists equities of emerging companies

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16
Q

The NEO Exchange

A

Provides listing services and facilitates trading in securities listed on the NEO, TSX, and TSX Venture.

17
Q

Where are most bonds and debentures sold

A

dealer markets

18
Q

what else can dealer markets be called

A

unlisted markets, over the counter markets.

19
Q

Is the a central marketplace for dealer market transactions

A

no, trades are only made by means of computer systems

20
Q

What is trading like in the unlisted market

A

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.

21
Q

Explain Over the Counter derivatives market

A

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.

22
Q

What is an attractive feature to the OTC derivative market

A

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.

23
Q

Which province requires trades in equity unlisted markets to be reported

A

Ontario, through the Ontario securities act. Must be reported through the web-based system of the Canadian Unlisted Board Inc.

24
Q

what is an alternative trading system

A

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.

25
Q

What is an Equity Electronic Trading System

A

can be used with ATS to provide automated trade mathcing and execution of orders from multiple buyers and sellers.

26
Q

What is a fixed-income electronic trading system

A

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:

  1. Can Deal
  2. CBID and CBID Institutional
  3. MarketAxess
  4. CanPX

CSC Volume 1 (13 decks)

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