Finance I: Key Terms and Concepts in Financial Markets - Prof. Lakshmi Narain, Study notes of Finance

Download Finance I: Key Terms and Concepts in Financial Markets - Prof. Lakshmi Narain and more Study notes Finance in PDF only on Docsity! Finance I: Chapter 2 Key Terms 1. Spot Markets: Markets in which assets are bought or sold for “on-the-spot” delivery (within a few days). 2. Futures Market: Markets in which participants agree today to buy or sell an asset at some future date; can reduce risks. 3. Money Markets: Financial markets in which funds are borrowed or loaned for short periods of time (<1 yr); short-term highly liquid debt securities. 4. Capital Markets: Financial markets for stocks and for intermediate or long-term debt (>1 yr). 5. Primary Markets: Market in which corporations raise capital by issuing new securities. 6. Secondary Markets: Markets in which securities and other financial assets are traded among investors after they have been issued by corporations. 7. Private Markets: Markets in which transactions are worked out directly between 2 parties. 8. Public Markets: Markets in which standardized contracts are traded on organized exchanges. 9. Derivative: Any financial asset whose value is derived from the value of some other “underlying” asset. 10. Investment Bank: An organization that underwrites and distributes new investment securities and helps businesses obtain financing (ibanks). 11. Commercial Bank: The traditional “department store” of finance serving a variety of savers and borrowers. 12. Financial Securities Corporation: A firm that offers a wide range of financial services, including investment banking, brokerage operations, insurance, and commercial banking. 13. Mutual Funds: Organizations that pool investor funds to purchase financial instruments and thus reduce risks through diversification. 14. Money Market Funds: Mutual funds that invest in short-term, low-risk securities and allow investors to write checks against their accounts. 15. OTC Market: (Over the Counter); Organizations that have tangible locations that conduct auction markets in designated (“listed”) securities.