Glossary of Financial Markets Terms: Bonds, Efficient Markets, and Transactions, Quizzes of Finance

Download Glossary of Financial Markets Terms: Bonds, Efficient Markets, and Transactions and more Quizzes Finance in PDF only on Docsity! TERM 1 SinkingFunds DEFINITION 1 1. can call for remption at par value when interest rates decrease 2. Can but the required number of bonds on the open market when interest rates increase TERM 2 Putable Bond DEFINITION 2 allows investors to require the company to pay in advanced TERM 3 Convertible Bonds DEFINITION 3 bonds that are exchangeable into common stock at a fixed price at the option of the bond holder, has a lower coupon payment TERM 4 Income Bond DEFINITION 4 pays interest only if the issuer has earned enough money to pay interest. Cannot bankrupt a company, more risker to the holder. TERM 5 Dutch Auction DEFINITION 5 indidivual investors place bids. actual transcation price is set at the highest price that causes all of the affected shares to be sold. Anyone that bid at or above the clearing price recieves stock. TERM 6 Treasury, Corporate and Municipal Bonds DEFINITION 6 treasury bond-government bonds that have no default risk corporate bond-business bonds, has a default risk municipal bond-state/local government bonds has some default risk, but no taxes if you live in that issuing state TERM 7 Indexeed/purchasing power bond DEFINITION 7 interest is based on inflation rate, interest rate increases as inflation increases. TERM 8 Bid vs. Ask DEFINITION 8 bid-lower amount that is bought out ask-higher amount that sells TERM 9 Weak form efficiency DEFINITION 9 investors can't profit by looking at past trends TERM 10 Semi-strong efficiency DEFINITION 10 all publicly available info is reflected in stock prices therefore it doesn't pay for analysis of reports. Note that inside information is not reflected.