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Definition
| Market specialists who bring buyers and sellers together, usually for a commission. |
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Definition
| Market specialists who "make markets" for securities by buying and selling from their own inventories. |
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Term
| Efficient Market Hypothesis |
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Definition
| A theory concerning the extent to which information is reflected in security prices and how information is incorporated into security prices. |
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Definition
| Assets that are claims on the cash flows from other assets; business loans, stocks, and bonds are financial assets. |
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Definition
| Conversion of securities with one set of characteristics into securities with another set of characteristics. |
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Definition
IPO
The first offering of a corporation's stock to the public. |
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Definition
| Firms that underwrite new security issues and provide broker-dealer services. |
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Definition
| The ability to convert an asset into cash quickly without loss of value. |
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Term
| Market Informational Efficiency |
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Definition
| The degree to which current market prices reflect relevant information and, therefore, the true value of the security. |
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Term
| Market Operational Efficiency |
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Definition
| The degree to which the transaction costs of bringing buyers and selleres together are minimized. |
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Definition
| The ease with which a security can be sold and converted into cash. |
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Definition
| Large commercial banks that transact in both the national and international financial markets. |
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Definition
| Markets where short-term financial instruments are traded. |
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Definition
| The rate of interest unadjusted for inflation. |
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Definition
| A financial market in which new security issues are sold by companies directy to investors. |
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Definition
| Information that is not available to all investors. |
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Definition
| The sale of an unregistered security directly to an investor, such as an insurance company. |
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Definition
| Information that is available to all investors. |
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Definition
| Financial markets where securities registered with the SEC are sold. |
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Term
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Definition
| Nonare claimsfinancial assets such as plant and equipment; productive assets are real assets; many financial assets are claims on cash flows from real assets. |
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Term
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Definition
| The interest rate that would exist in the absence of inflation. |
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Definition
| A financial market in which the owners of outstanding securities can sell them to other investors. |
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Term
| Semistrong-form (of the efficient market hypothesis) |
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Definition
| The theory that security prices reflect all public information but not all private information. |
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Term
| Strong-form (of the efficient market hypothesis) |
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Definition
| The theory that security prices reflect all information. |
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Term
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Definition
| For a security, the value of the cash flows an investor who owns that security can expect to receive in the future. |
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Term
| Weak-form (of the efficient market hypothesis) |
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Definition
| The theory that security prices reflect all information in past prices but do not reflect all private or all public information. |
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Term
| Which of the following grants the owner the right to purchase an asset at a prespecified price for a prespecified period of time? |
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Definition
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Term
| During an economic expansion, we would expect |
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Definition
| interest rates to increase. |
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Term
| What is the theory that security prices reflect all information, whether public or private? |
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Definition
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Term
| Which of the following services does an investment banker not perform? |
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Definition
Portfolio management.
(Performs Origination, Underwriting and Distribution) |
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Term
| Which one of the following is not true regarding the New York Stock Exchange? |
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Definition
No central trading location
(has organized market, listing requirements, and membership requirements) |
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