10696948
Description
Flashcards by Elena Alferova , updated more than 1 year ago
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Created by Elena Alferova
over 8 years ago
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| Question | Answer |
| Real Assets | Land, buildings, and equipment that are used to produce goods and services |
| Financial Assets | Claims such as securities to the income generated by real assets |
| Agency problem | Conflicts of interest among stock-holders, bondholders and managers |
| Financial Intermediary | An institution such as bank, mutual fund, investment company, or insurance company that serves to connect the household and business sectors so households can invest and business can finance production |
| Investment Company | Firm managing funds for investors |
| Investment Bankers | Firms specialising in the sale of new securities to the public, typically by underwriting the issue |
| Pass-Through Security | Pools of loans sold in one package. Owners of pass-through securities receive all principal and interest payments made by the borrowers |
| Primitive Security | An instrument such as stock or bond for which payments depend only on the financial status of its issuer |
| Derivative Security | Is created from the set of primitive securities to yield returns that depend on factors beyond the characteristics of the issuer and that may be related to prices of other assets |
| Direct Search Market | Buyers and sellers seek each other directly and transact directly |
| Brokered Market | A market where an intermediary (a broker) offers search services to buyers and sellers |
| Dealer Market | A market where traders specialising in particular commodities buy and sell assets for their own accounts |
| Auction Market | A market where all traders in a good meet at one place to buy or sell an asset |
| Globalization | A tendency toward a worldwide investment environment and the integration of national capital markets |
| Securitization | Pooling loans for various purposes into standardised securities backed by those loans, which can then be traded like any other securities |
| Bundling/Unbundling | A trend allowing to create securities either by combining primitive or derivative securities into one composite hybrid or by separating returns on an asset into classes |
| Financial Engineering | The process of bundling and unbundling securities |
| The formula of an infinitely decreasing progression | |
| How to calculate PV of bond if maturity is 10 years (for example)? | |
| Formula for accrued interest | coupon* (days since last coupon payment/365) |
| Formula for clear price | Full price - Accrued interest |
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