Chapter 6 Flashcards Preview

Investments Test 2 > Chapter 6 > Flashcards

Flashcards in Chapter 6 Deck (22):
1

An investment company with a fixed number of shares that are bought and sold in the secondary securities market

Closed-end investment company

2

A mutual fund; an investment company from which investors buy shares and to which they resell them

Open-end investment company

3

An open-end investment company

Mutual fund

4

The asset value of a share in an investment company; total assets minus total liabilities divided by the number of shares outstanding

Net asset value (NAV)

5

Sales charge levied by mutual funds

Load fee

6

A mutual fund that does not charge a commission for buying and selling its shares

No-load mutual fund

7

A mutual fund that charges a commission to purchase or sell its shares

Load fund

8

Investors who go against the consensus concerning investment strategy

Contrarians

9

A mutual fund whose portfolio seeks to duplicate an index of stock prices

Index fund

10

Mutual funds that specialize in short term securities

Money market mutual funds

11

Short-term securities, such as treasury bills, negotiable certificates of deposit,or commercial paper

Money market instruments

12

Short-term debt of the federal government

U.S. treasury bill

13

A certificate of deposit in which the rate and the term are individually negotiated by the bank and the lender and which may be bought and sold

Negotiable certificate of deposit (Jumbo CD)

14

Time deposit in a foreign bank and denominated in dollars

Eurodollar certificate of deposit (Eurodollar CD)

15

Short-term promissory notes issued by the most creditworthy corporations

Commercial paper

16

Sale of a short-term security in which the seller agrees to buy back the security at a specified price

Repurchase agreement

17

Short-term promissory note guaranteed by a bank

Bankers acceptance

18

Short-term government security secured by expected tax revenues

Tax anticipation note

19

Fees that a mutual fund may charge to cover marketing and advertising expenses

12b-1 fees

20

A measure of performance that compares realized return with the return that should have been earned for the amount of risk borne by the investor

Jensen performance index (alpha)

21

A risk-adjusted measure of performance that standardizes the return in excess of the risk-free rate by the portfolios systematic risk

Treynor performance index

22

A risk-adjusted measure of performance that standardizes the return in excess of the risk-free rate by the standard deviation of the portfolios return

Sharpe performance index