Download Glossary of Financial Markets Terms: Bonds, Efficient Markets, and Transactions and more Quizzes Finance in PDF only on Docsity!
SinkingFunds
- can call for remption at par value when interest rates decrease 2. Can but the required number of bonds on the open market when interest rates increase TERM 2
Putable Bond
DEFINITION 2 allows investors to require the company to pay in advanced TERM 3
Convertible Bonds
DEFINITION 3 bonds that are exchangeable into common stock at a fixed price at the option of the bond holder, has a lower coupon payment TERM 4
Income Bond
DEFINITION 4 pays interest only if the issuer has earned enough money to pay interest. Cannot bankrupt a company, more risker to the holder. TERM 5
Dutch Auction
DEFINITION 5 indidivual investors place bids. actual transcation price is set at the highest price that causes all of the affected shares to be sold. Anyone that bid at or above the clearing price recieves stock.
Treasury, Corporate and Municipal Bonds
treasury bond-government bonds that have no default risk corporate bond-business bonds, has a default risk municipal bond-state/local government bonds has some default risk, but no taxes if you live in that issuing state TERM 7
Indexeed/purchasing power
bond
DEFINITION 7 interest is based on inflation rate, interest rate increases as inflation increases. TERM 8
Bid vs. Ask
DEFINITION 8 bid-lower amount that is bought out ask-higher amount that sells TERM 9
Weak form efficiency
DEFINITION 9 investors can't profit by looking at past trends TERM 10
Semi-strong efficiency
DEFINITION 10 all publicly available info is reflected in stock prices therefore it doesn't pay for analysis of reports. Note that inside information is not reflected.
Physical Asset Market
asset market for products like wheat, autos, real estate. things that are tangible TERM 17
Secondary Market
DEFINITION 17 already outstanding securities are traded among investors TERM 18
Primary Market
DEFINITION 18 markets in which corporations raise new capital, IPOS TERM 19
Futures vs. Spor Market
DEFINITION 19 future market-argee today to buy or sell in the future spot- assets are bought or sold for on the spot delivery TERM 20
Private Market
DEFINITION 20 negotiated directly between two parties ex. bank loans
Public Market
where standardized contracts are traded on organized exchanges ex. common stock, corporate bonds TERM 22
Warrants for Bonds
DEFINITION 22 give bondholders an option to buy stock for a stated price TERM 23
Dealer Markets
DEFINITION 23 NASD, few dealers all facilities that are needed to conduct security transation buy transcations are not made on the physical location exchange
