Financial Investment Analysis
for lecture @BI Oslo
for lecture @BI Oslo
Set of flashcards Details
| Flashcards | 54 |
|---|---|
| Language | English |
| Category | Micro-Economics |
| Level | University |
| Created / Updated | 20.08.2014 / 20.08.2014 |
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call option
The right to buy an asset at a specified price on or before a specified expiration date
put option
The right to sell an asset at a specified exercise price on or before a specified expiration date.
futures contract
obliges traders to purchase or sell an asset at an agreed - upon price at a specified future date.
Private Placement
primary offerings in which shares are sold directly to a small group of institutional or wealthy investors.
Initial Public Offering (IPO)
First sale of a stock by a formerly private company
Underwriters
Underwriters purchase securities from the issuing company and resell them to the public
Prospectus
A description of the firm and the security is issuing
Dealer Markets
markets in which traders specialzing in particular assets buy and sell for their own accounts
auction market
a market where all traders meet at one place to buy or sell an asset
bid market
The price at which a dealer it other trader is willing to purchase a security
ask price
The price at which a dealer or other trader will sell a security
bid-ask spread
The difference between the bid and asked prices
limit buy (sell) order
an order specifying a price at which an investor is willing to buy or sell a security
stop order
trade is not to be executed unless stock hits a price imit
over the counter (OTC) market
an informal network of brokers and dealers who negotiate sales of securities
Real Assets
assets used to produce goods and services (e.g. the land, buildings, equipment, knowledge)
financial assets
claims on real assets or the income generated by them (e.g. stocks, bonds)
fixed-income (debt) securities
pay a specific cash flow over a specific period
equity
an ownership share in a corporation
Derivative Securities
Securities providing payoffs that depend on the values of other assets.
Agency Problems
Conflict of Interest between Managers and Shareholders
Asset Allocation
Allocation of an investment portfolio across broad asset classes
Security Selection
choice of specific securities within each asset class
Security Analysis
Analysis of the value of securities
Risk - return Trade-off
assets with higher expected returns entail greater risk
Passive Management
Buying and holding a diversified portfolio without attempting to identify mispriced securities
Active Management
Attempting to identify mispriced securities or to forecast broad market trends
Financial Intermediaries
institution that "connect" borrowers and lenders by accepting funds from lenders ab loaning funds to borrowers
Investment Companies
firms managing funds for investors. An investment company may manage several mutual funds
Investment bankers
Firms specializing in the sale of new seurities to the public, typically by underwriting the issues
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