This provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds
What is the Primary Market?
100
What is the principal loan amount that the borrower must repay?
What is Par or Face Value?
100
A trade that will only be executed if the order's price conditions are met?
What is a Limit Order?
100
This includes any capital gain (or loss) that occurred as well as any income that you received from a specific investment.
What is a Dollar Return?
100
The average of the possible returns weighted by the likelihood of those returns occurring.
What is the expected return?
200
These are short-term funds transferred between financial institutions, usually for no more than one day
What are Federal Funds?
200
An amount the issuer pays to compensate the bondholders for getting the bond called.
What is the Call Premium?
200
The price that investors buy stock at.
What is the quoted ask price?
200
Defined as the volatility of an investment, which includes firm specific risk as well as market risk.
What is the Total Risk?
200
Typically considered the return on U.S. government bonds and bills and equals the real interest plus the expected inflation premium.
What is the Risk-free Rate?
300
The interest rate that would exist on a default-free security if no inflation were expected.
What is real interest rate?
300
The bond's annual coupon rate divided by the bond's current market price.
What is a bond's current yield?
300
The last four quarters of dividend income expressed as a percentage of the current stock price is know as?
What is dividend yield?
300
A measure of risk to reward earned by an investment over a specific period of time.
What is the Coefficient of Variation?
300
A model that includes an equation that relates a stock's required return to an appropriate risk premium.
What is Asset Pricing?
400
According to this theory of term structure of interest rates, at any given point in time, the yield curve reflects the market's current expectations of future short-term rates.
What is Unbiased expectations theory?
400
Bonds that carry significant risk that the issuer will not make current or future payments.
What are Junk Bonds?
400
Often estimated by using the P/E ratio model along with the firm's growth rate.
What is a stock's future price?
400
The portion of total risk that is attributable to firm or industry factors and can be reduced through diversification.
What is Firm Specific Risk?
400
The use of debt to increase an investment position.
What is Financial Leverage?
500
A theory arguing that individual investors and financial institutions have specific maturity preferences, and to encourage buyers to hold securities with maturities other than their most preferred requires a higher interest rate.
What is the Market Segmentation Theory?
500
The chance that the bond issuer will not be able to make timely payments.
What is the Credit Quality Risk?
500
A stock usually characterized by low P/E ratios and high growth rates.
What is a Value Stock?
500
Another term for market risk.
What is Nondiversifiable Risk?
500
The line on a graph of return and risk (standard deviation) from the risk-free rate through the market portfolio.