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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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Definition
| market where prices reflect the knowledge and expectations of all investors |
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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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Term
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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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Term
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Definition
| conversion of securities with one set of characteristics into securities with another set of characteristics |
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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
| initial public offering (IPO) |
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Definition
| the first offering of a corporation's stock to the public |
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Definition
| firms that underwrite new security issues |
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Term
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Definition
| the ability to convert an asset into cash quickly without loss of value |
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Definition
| the ease with which a security can be sold and converted into cash |
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Term
| market operational efficiency |
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Definition
| the degree to which the transaction costs of bringing buyers and sellers together are minimized |
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Term
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Definition
| large commercial banks that provide both traditional and investment banking services throughout the world |
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Term
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Definition
| markets where short-term financial instruments are traded |
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Term
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Definition
| the rate of interest that is unadjusted for inflation |
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Term
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Definition
| a financial market in which new security issues are sold by companies directly to investors |
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Term
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Definition
| information that is not available to all investors |
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Term
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Definition
| the sale of an unregistered security directly to an investor, such as an insurance company or a wealthy individual |
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Term
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Definition
| information that is available to all investors |
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Term
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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
| nonfinancial 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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Term
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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
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Definition
| total taxes paid divided by taxable income |
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Term
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Definition
| financial statement that shows a firm's financial position (assets, liabilities, and equity) at a point in time |
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Term
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Definition
| the net value of an asset or liability recorded on the financial statements—normally reflects historical cost |
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Term
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Definition
| the cash flow that a firm generates for its investors in a given period, excluding cash inflows from the sale of securities to investors |
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Term
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Definition
| allocation of the cost of an asset over its estimated life to reflect the wear and tear on the asset as it is used to produce the firm's goods and services |
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Term
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Definition
| net income divided by the number of common shares outstanding |
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Term
| generally accepted accounting principles (GAAP) |
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Definition
| a set of rules that defines how companies are to prepare financial statements |
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Term
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Definition
| a financial statement that reports a firm's revenues, expenses, and profits or losses over a period of time |
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Term
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Definition
| the tax rate paid on the last dollar of income earned |
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Term
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Definition
| the price at which an item can be sold |
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Term
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Definition
| a financial statement that shows a firm's cash receipts and cash payments and investments for a period of time |
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Term
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Definition
| stock that the firm has repurchased from investors |
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Term
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Definition
| a standard against which performance is measured |
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Term
| common-size financial statement |
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Definition
| a financial statement in which each number is expressed as a percent of a base number, such as total assets or total revenues |
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Term
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Definition
| the risk that a firm will not be able to pay its debt obligations as they come due |
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Term
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Definition
| the use of debt in a firm's capital structure; the more debt, the higher the financial leverage |
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Term
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Definition
| A number from a financial statement that has been scaled by dividing by another financial number |
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Term
| financial statement analysis |
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Definition
| the use of financial statements to evaluate a company's overall performance and assess its strengths and shortcomings |
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Term
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Definition
| the inability to pay debts when they are due |
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Term
| North American Industry Classification System (NAICS) |
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Definition
| a classification system for businesses introduced to refine and replace the older SIC system |
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Term
| Standard Industrial Classification (SIC) System |
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Definition
| a numerical system developed by the U.S. Government to classify businesses according to the type of activity they perform |
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Term
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Definition
| analysis of trends in financial data |
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