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Practical Financial Management
Chapter 5: The Financial System, Corporate Governance, Interest, and the Financial Crisis of 2008
20
Finance
Undergraduate 3
08/13/2011

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Cards

Term
Financial Markets
Definition
These connect production's need for money with consumption's available savings.
Term
Maturity Matching
Definition
A project's duration should match the term of the financing that supports it?
Term
Primary Market
Definition
The initial sale of a security?
Term
Secondary Marketq
Definition
Subsequent sales between investors of securities are?
Term
Investment Bank
Definition
An __________ ____ helps companies market their securities.
Term
Financial Intermediary
Definition
A __________ _________ sells shares in itself and invests the funds collectively on behalf of its investors.
Term
Floor Brokers
Definition
Who trades on the floor of the exchange?
Term
Securities and Exchange Commission (SEC)
Definition
The sale of securities is regulated by the federal government through which commission?
Term
Publicly Traded Company
Definition
A ________ ________ _______ can sell securities broadly after a prospectus is approved by the SEC.
Term
Employee Stock option
Definition
An _________ ______ ______ grants the right to purchase stock at a set price over a limited period.
Term
Sarbanes - Oxley Act
Definition
SOX?
Term
Default Risk
Definition
The chance that the borrow won't pay principal or interest?
Term
Liquidity Risk
Definition
What risk entails being unable to sell the bond of a little known issuer?
Term
Maturity Risk
Definition
Which risk arises because long-term bond prices change more with interest swings than short-term bond prices?
Term
Expectations Theory
Definition
Which Theory says, "Today's rates rise or fall with term as future rates are expected to rise or fall"?
Term
Liquidity Preference Theory
Definition
Which Theory says, " Investors prefer shorter-term securities and must be induced to make longer loans"?
Term
Market Segmentation Theory
Definition
Which theory says, "Loan terms define independent segments of the debt market, which set seperate rates"?
Term
Default
Definition
A borrower ______ by failing to make loan payments.
Term
Forecloses
Definition
A lender _______ by taking a defaulted borrower's property.
Term
Preadatory Lending
Definition
Making loans to people who clearly can't afford them is what?
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