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Flashcards in Exam 1 Deck (40)
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1

Money Markets vs. Capital Markets

Money Markets
-short-term
-high liquid

Capital Markets
-long-term
-debt securites

2

What is an example of the largest Capital Market?

New York Stock Exchange NYSE

3

2 stock exchanges that have a physical location?

New York Stock Exchange (NYSE)
American Stock Exchange (AMEX)

4

NASDAQ

-no physical location
-National Association of Securities Dealers Automated Quotation
-is a network of computers

5

When did the AMEX and the NASDAQ merge and split?

merged in 1998

split in 2005

6

Expectations Theory

-if inflation is expected to rise, then Yield curve goes up

-if inflation is expected to go down, then Yield Curve goes down

7

Maturity Risk Theory

Says as the maturity date increases there is an upward push on the yield curve due to the risk

8

Technological advances in computers and telecommunications, along with the globalization of banking and commerce has led to what?

-Deregulation
-increased competition through the world

9

How does large amounts of capital moving around the world is response to changes in interest rates/exchange rates affect local economies?

It disrupts them

10

NOWC

-Net Operating Working Capital

CA - ( AIP + Accurals)

11

NOPAT

Net Operating Profit after tax

EBIT(1-T)

12

Black Knight

-buys majority of IPO of company
-company just coming to market
-tries to gain control of company

13

White Knight

-Company that buys another company
-to prevent hostile takeover from third-party(bad) company

14

If U.S. interest rates are High, what will foreign people do? What will it do to the purchasing power of the U.S. dollar?

-Foreign people will invest in U.S.
-Purchasing power goes up

15

If inflation increases, what will this do to the interest rate?

Interest rate will increase

16

Who is responsible for a firm's strategic decisions?

Chairmen of the Board

17

Who is responsible for a firm's actual operations, such as buying/selling a firm's products?

Chief Operations Officer (COO)f

18

What is the Compensation Committee?

-sets compensation packages for senior officers
-made up 3 non-employee people

19

When can Mutual Funds be traded during the day? When can ETFs be traded?

Mutual Funds
-only traded at end of day
ETFs
-can be traded like a stock

20

Financial Intermediaries

-create new products for investors

-credit unions, JP Morgan, Fidelity, Commercial banks

21

Which is more regulated, Hedgefunds or Mutual Funds?

Mutual Funds

22

How many seats does the NYSE have?
Dimensions of window?
Dimensions of skylight?

1366 seats
96 by 50ft WINDOW
30 by 30 SKYLIGHT

23

Date NYSE was created?

May 17, 1792

24

How did people first meet up to trade stocks with NYSE?

Around a Buttonwood/Sicklemore tree

25

AMEX merged with ___ in 2008. However, they did not integrate until into ___ until ___

Merged with Euronext in 2008

Integrated into NYSE in 2009

26

Year that NASDAQ was created

1971

27

If EVA is positive, what does that mean about the ROE

ROE exceeds the Cost of Equity

28

Who built the NYSE window and in what year?

George Post 1903

29

Efficient Markets Hypothesis

-says stocks are always in equilibrium
-impossible for investor to consistently beat the market

30

EVA

-economic value added
-used to determine managerial compensation
-good correlation of stock price
-good measure to shareholder value

31

Europe's dollar has increased from $1.09 to $1.24.
How does this affect the U.S.

Means U.S. is not buying as much stuff from Europe

32

___ who works for Goldman Sachs, went on CNBC and asked how computer stocks were valued

Abby Joseph Cohen

33

What is the average PE of the S and P500

15.5

34

What was the date of NASDAQ's peak? What was it's value?

3/10/2000
5100

35

NASDAQ hit a peak of 5100 and then went down to ___

1200

36

The Federal deficit was ___ in 2006 and ___ in 2018.

762Billion in 2006
800 Billion in 2018

37

Since the economic crisis of 2008, how many quantitative easing programs has the government conducted? When did the last on end

3 programs
October 2014

38

NASDAQ acquired the ___ and 25% of the ___

Philadelphia Stock Exchange

25% of London Stock exchange

39

How many stocks does the Dow Jones Industrial average

30

40

Dow Jones and the S and P500 hit all time highs in ___

Spring of 2016