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FIN 300 Exam 2 > Wiley Definitions > Flashcards

Wiley Definitions Flashcards

1
Q

Securitization of Mortgage Loans

A

pooling together mortgage loans with similar characteristics together and selling claims of the cash flows to investors.

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2
Q

Yield to Maturity

A

the discount rate that makes the present value of the coupon and principal payments equal to the price of the bond.

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3
Q

Say-on-pay SEC Rule

A

Shareholders are provided with an annual non-binding vote on CEO compensation that doesn’t require a response by the board of directors.

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4
Q

Caveat of Stock-Based CEO Compensation

A

changes in stock price might come from macroeconomic factors rather than the decision making of the CEO.

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5
Q

Coefficient of Variation

A

STD / Expected Rate of Return

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6
Q

What is a subprime mortgage-backed security?

A

A security with high risk, greater returns, and mainly sold to institutional investors.

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7
Q

(T/F) When market interest rates go up, a 10 year bond will decrease in value more than a 1 year bond.

A

True

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8
Q

What debt security has the greatest market and most active secondary market?

A

Treasuries

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FIN 300 Exam 2 (3 decks)

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