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1

Security Markets and their 2 primary functions

financial marketplaces for stocks and bonds and serve two primary functions:

1.

2

Primary Market

handle the sale of newly issued securities. Proceeds go to the company

3

Secondary Market

handle the trading of securities between investors with the proceeds of the sale going to the seller.

4

Initial Public Offerings

The first offering of a corporation’s stock. First time a corporation's stock is offered and sold to persons outside of the company. IPOs occur in the primary market!

5

Investment bankers

Specialists who assist in the issue and sales of new securities

6

Institutional investors

Large organizations such as pensions and funds or mutual funds that invest in their own funds or the funds if others

7

Stock exchange

An organization use members can buy and sell (exchange) securities n behalf of companies and individual investors

8

Over the counter (OTC) market -

provides companies and investors with means to trade stocks not listed on the national securities exchange

9

The securities and exchange commission

The federal agency responsible for regulating the various stock exchanges. Created in 1934 through the securities and exchange act
Prohibit insider trading
Part of IPO

10

Saying stock is considered....

Equity financing

11

Issuing bond is considered...

Debit financing

12

Program trading

Giving instructions to computers to automatically sell if the price of a stock dips to a certain point to avoid losses

13

Buying stock on margin

Borrowing some of the stocks purchase cost from the brokerage firm

14

Diversification

Using several different types of investments I spread the risk of investing

15

Mutual fund

An organization that buys stock and bonds and then sells shares in those securities to the public. The fund pools investors' money and then it's stick according to the funds purpose.

16

Money & Bartering

Money- anything rookie generally accept as payment for goods and services

Battering- the direct trading of a good or service for a good or service

17

Standards for a useful form if money

Portability , unique , divisibility, stability , and durability

18

Money supply

M1 / M2 / M3

The amount of money the federal reserve makes available for people

M1

M2

M3

19

Why is it important to control the supply of money?

1. To control the price of goods and services

2.prices of goods and services are affected by inflation and deflation

20

The federal reserve

The federal entity incharge of us monetary policy and controlling the us money supply.

The chairman is in control of the money supply

There are 12 federal reserve banks

21

Banks help companies conduct business with other countries by 3 services :

1. Letter of credit - a promise by the bank to pay the sellers I be amount if certain conditions are met

2.bankers acceptance- a promise the bank will pay a specific amount at any given time

3.money exchange -allows companies to go to a bank and exchange currencies to use a particular country

22

World bank

Responsible for financing economic development in less developed countries

23

International Monetary Fund ( IMF)

monitors the monetary policy of member nations to ensure a global system that works best for all nations

24

Judiciary Branch

Branch of government chosen to oversea the legal system through a system of courts

-The US court system is organized at the federal, state, and local levels

25

Product Liability

holds businesses liable for harm that results from the production, design, or inadequate warnings of products they market ((average case = $5M))

26

Strict Product Liability

Liability without regard to fault; a company can be held for defective product even if they dont know of the defect

27

Criminal law

defines crimes, establishes punishments, and regulates the investigation and prosecution of people accused of committing crimes

28

Civil Law

proceedings cover non-criminal acts - divorce, marriages, personal injury lawsuits and more.

29

Business Law

refers to the rules, statues, codes and regulations that provide a legal framework for the conduct of business. These included product liability, sales, compensation, consumer protection

30

statutory law

includes state and federal constitutions, legislative enactments, treaties of the federal government and ordinances; written law

31

Common law
&
precedent

the body of law that comes from decisions handed down by judges/courts, unwritten law.

precedent- decisions judges have made in previous cases to guide their handling of new cases

32

administrative agencies

federal or state institutions and other government organizations with delegated powers to create rules and regulations within their given area of authority.

EX; the federal reserve board

33

Tort Law

a wrongful act that causes injury ro another person's body, property, or reputation

34

Negligence

behavior that causes unintentional harm or injury

35

Patent

a document that gives inventors exclusive rights to their inventions for 20 years

36

Copyright

protects a creator's rights to material such as books, articles, photos, painting, and cartoons, lifetime + 70 years

37

deregulation

the government withdraws certain laws and regulations that seem to hinder competition.

Active in : Airline industry

38

business technology in 1970s

Data Processing- Primarily used to improve the flow of financial information

39

Data

the raw, analyzed and unorganized facts and figures

40

information

is processed and organized data that managers can use for decision making

41

technology in the 200ws

changes the traditional flow of information so that the database goes to the individual rather than the individual going to the database

42

Types of business information available

business process information
physical ((cameras))
Biological data- fingerprints
Public Data- Public sources
Data that indicates the persons interests

43

4 characteristics that make information useful

1.quality- accurate & reliable
2.Completeness- enough to make a decision
3. timeliness- gets to manager is time to make critical decisions
4.Relevance-too much data managers must learn which questions to ask to get the correct data

44

Shareware VS Public domain software

shareware- copyrighted, but is distributed free of charge with a request that users send a specific fee to the developer if they decided to use it

public domain software- free for the taking