Money and Capital Markets Exam 1: Concepts and Definitions, Exams of Nursing

Download Money and Capital Markets Exam 1: Concepts and Definitions and more Exams Nursing in PDF only on Docsity! Money and Capital Markets Exam 1 questions and answers Primary Market - Markets in which corporations raise funds through new issues of securites Secondary Market - A market that trades financial instruments once they are issued Money Market - Markets that trade debt securities or instruments with maturities of one year or less Capital Market - Markets that trade debt (bonds) and equity (stocks) instruments with maturities of more than one year Foreign Exchange Market - Trading one currency for another Derivative Security Market - The markets in which derivative securities trade Liquidity - The ease with which an asset can be converted into cash quickly and at fair market value Money and Capital Markets Exam 1 questions and answers Loanable Funds Theory - A theory of interest rate determination that views equilibrium interest rates in financial markets as a result of the supply and demand for loanable funds Supply of Funds - Term commonly used to describe funds provided to the financial markets by net suppliers of funds Demand for Funds - Term used to describe the total net demand for funds by fund users Equilibrium Interest Rate - The interest rate that equates the aggregate quantity of loanable funds demanded for a financial security Inflation - The continual increase in the price level of a basket of goods and services Default Risk - The risk that a security issuer will default on that security by being late on or missing an interest or principal payment Money and Capital Markets Exam 1 questions and answers Individuals - Eurodollars - LIBOR - Duration - Macaulay Duration - "Modified" Duration - STRIPs - TIPS - Accrued Interest - Money and Capital Markets Exam 1 questions and answers Clean Price - Dirty Price - Auction Process - Municipal Bond - Corporate Bond - Offering Process - Firm Commitment - Best-Efforts - Private Placement - Money and Capital Markets Exam 1 questions and answers Bond Characteristics - Bond Ratings - Interest Rate Spreads - Convertible Bonds - Eurobonds - Foreign Bonds - Sovereign Bonds - Yield Curve - A graphical representation of the relationship between the yield on bonds of the same credit quality but different maturities Credit Risk - The risk of loss resulting from a borrower's failure to repay a loan or meet contractual obligations