Chapter 1 - Regulatory Entities, Agencies and Market Participants Flashcards
Ask Price
The price a seller is willing to accept for a security.
ADR (American Depositary Receipt)
A negotiable instrument issued by a U.S. bank that trades in the U.S. financial markets and represents shares of a foreign stock.
Bid Price
The price a buyer is willing to pay for a security
Bond
A debt obligation in which the borrower promises to pay a set coupon rate until the issue matures, at which time the principal is repaid.
Beneficiary
A person who receives the benefits of an insurance policy.
Broker/Dealer
A firm that effects securities transactions for its own account or for its own account or for the accounts of others.
Margin account
A brokerage account that allows investors to purchase securities with borrowed funds using credit extended by the broker/dealer
Member firm
Broker/dealer belonging to a self - regulatory organization (SRO), such as FINRA or NYSE, or both
Mutual fund
A professionally managed open - end investment company issuing redeemable securities in a continuous offering of shares.
Option
A security giving the holder the choice to either purchase or sell a security at a set price for a specific period.
Prospectus
A full and fair risk disclosure required by the Securities and Exchange Commission for all new offerings of nonexempt securities.
Security
A financial instrument that may trade for value.
Self - Regulatory Organization (SRO)
An organization that is authorized to enforce standards and requirements related to securities trading and brokerage.
Stock
A type of security that represents ownership in a corporation.
Underwriter
A broker/dealer or investment bank that assists a company in offering and distributing securities to the public.
