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| process by which funds are transferred from those having excess funds (savers) to those needing additional funds (users) |
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| financial instruments such as stocks and bonds |
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| short-term debt securities issued by governments, financial institutions and corporations |
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| bonds sold by the U.S. Department of the Treasury |
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| bonds issued by state or local governments |
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| a type of municipal bond whose proceeds are used to pay for a project that will produce revenue |
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| a type of municipal bond whose proceeds are used to pay for a project that will not produce revenue |
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| a bond that is backed only by the financial reputation of the issuing corporation (no collateral backing it) |
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| a loan made to a borrower with poor credit ratings...*awkward turkey* |
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| bonds with ratings of BB and below because of the great risk |
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| allows the issuer to redeem the bond before its maturity at a specified price |
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| gives the bondholder or preferred stockholder the right to exchange the bond or preferred stock for a fixed number of shares of common stock |
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| shares of ownership in a company |
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| stocks that sell for less than $5/share |
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| convert existing shares into more shares |
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| investment manager for the fund busy securities and sells shares in fund to public (essentially a basket of goodies) |
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| selling a stock that you don't have but have to give back eventually |
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| financial market in which new security issues are first sold |
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| initial public offering (IPO) |
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Definition
| when a company offers stock for sale to the general public for the first time |
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| financial market in which already issued securities are traded between investors |
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| market in which common stocks are traded, such as the New York Stock Exchange |
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| coins, currency, bank checking, demand deposits |
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| M1 + savings accounts, $ market, mutual funds, CDs |
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Definition
| controlling $ supply growth rate by buying/selling U.S. Treasury securities |
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% rate of checking and savings that a bank must maintain at location or deposit at Fed
lower rate means more $ to lend, increasing $ supply |
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Definition
interest rate that Fed charges for short-term loans to banks
high rate discourages borrowings by banks, resulting in less loans being made |
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Definition
| use of material nonpublic information to make investment profits |
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Definition
| planning, obtaining, and managing the company's funds to accomplish its objectives as effectively and efficiently as possible |
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Definition
| process of maximizing the wealth of the firm's shareholders by striking the optimal balance between risk and return |
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| document that specifies the funds needed by a firm for a period of time, the timing of inflows and outflows, and the most appropriate uses/sources of funds |
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| funds obtained through borrowing |
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| funds provided by the firm's owners when they reinvest earnings, make additional contributions, liquidate assets, issue stock to the general public, or raise capital from outside investors |
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| increasing the rate of return on funds invested by borrowing funds |
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| liability + owners' equity |
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| firms that raise $ from wealthy individuals and institutional investors and invest funds in promising businesses |
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| private investment companies open only to qualified large investors |
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| offer made to target firm's shareholders |
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| transaction when public shareholders are bought out and firm reverts to private status |
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| business sells its accounts receivable to either a bank or finance company at a discount |
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| independently owned/operated firm, not dominant in its field and meets industry-specific size standards for income or number of employees |
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| organization that provides temporary low-cost, shared facilities to small start-up ventures |
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| contractual agreement that specifies methods by which a dealer can produce/market a supplier's good/service |
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| 2 or more people owning business |
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| legal entity with authority to act and have liability apart from owners |
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| combining of 2 or more firms |
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| 2 firms in different stages of related business merge |
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| 2 firms in same industry merge |
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| joining of unrelated firms |
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| incorporated in one nation, operated in another |
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| company partnership for specific undertaking |
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| unit or agency of government owns and operates an organization |
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| collective ownership (cooperative) |
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| owners join forces to operate all or part of functions in their industry |
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| written document providing an orderly statement of company goals, methods of achieving them, and standards of measuring said goals |
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| person who identifies a business opportunity and allocates available resources to tap that market |
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| person who starts one business, runs it, and then starts and runs additional businesses |
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| person who recognizes societal problems and uses business principles to develop innovative solutions |
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| person who starts a business to reduce work hours and create a more relaxed lifestyle |
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| initial funding needed to launch a new venture |
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| borrowed funds that entrepreneurs must repay |
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| wealthy individuals who invest directly in a new venture in exchange for an equity stake |
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| process of promoting innovation within the structure of an existing organization |
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| initiated by an employee who conceives an idea and then recruits resources from within to turn it into a commercial product |
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| company-initiated projects that focus on a few products and technologies in which there is potential for rapid marketplace winners |
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