TCHE302_Topic 5_Financial Markets

August 19, 2024.

An arrangement by two counterparties to exchange one stream of cash flows for another.

It is unclear without additional context.

To facilitate the buying and selling of financial instruments and to allocate resources efficiently.

A derivative instrument.

Short-term instruments.

Financial instruments used for short-term borrowing and lending, typically with maturities of one year or less.

A bond that gives the issuer the right to redeem it before the final maturity date.

Individuals, institutions, and governments.

To facilitate the efficient and orderly sale of new financial securities.

There are primary markets, secondary markets, money markets, and capital markets.

It appears to be a reference date, possibly for a lecture or assignment.

Contractual agreements by borrowers to pay holders fixed amounts at regular intervals until maturity.

To provide liquidity and funding for short-term needs.

The demand and supply for funds.

Intermediate and long-term instruments.

The issuer.

A short-term debt instrument or time deposit.

To reallocate assets efficiently and support economic growth.

They invest and save through various financial instruments.

A short-term debt instrument issued by large banks and well-known corporations.

Informational efficiency.

Participants include individual investors, institutions, governments, and corporations.

The initial listing of a corporation on the stock exchange.

Chapters 2 and 8.

A money market instrument used for short-term financing.

It represents the core features of the financial system without complexity.

Ownership claims are widespread and easily transferable.

It provides a market for trading managed products.

An agreement where the borrower sells securities to the lender and commits to repurchase them at a specified date and price.

A percentage interest in the firm, consistent with the percentage of outstanding stock held.

Chapter 11.

A bank draft issued by a firm, payable at a future date, and guaranteed by the bank.

The time from the issuing date to the instrument’s expiration date.

Standardized agreements to buy or sell an asset at a certain time in the future for a certain price.

Current and future needs, length of fund usage, scale of funds needed, and risk of funded projects.

Treasury bill or commercial paper.

Banks.

A bond that gives the holder the right to convert it into a pre-specified number of shares of common stock.

A written legal obligation of one party to transfer something of value, usually money, to another party at a future date under specified conditions.

By managing funds, providing loans, and facilitating transactions.

A formal exchange facilitating the issue, buying, and selling of equity securities.

A type of preferred stock that accumulates unpaid dividends.

To acquire funds.

All information available in the market.

Platforms where buyers and sellers trade financial assets.

To provide services such as lending, investment, and risk management.

The issue of additional shares to existing shareholders on a pro-rata basis.

Chapter 3.

In the mid-16th century England.

To facilitate trading in existing shares.

Issues the commercial paper to raise funds.

To facilitate the interaction between surplus units (savers) and deficit units (borrowers).

Owners (shareholders) do not affect the day-to-day affairs.

Buyers and sellers meet in one central location to conduct trades.

No maturity and no refund.

Stockholders own a part of the corporation, while bondholders are creditors with no ownership interest.

Professionally managed funds.

On the Federal Reserve's H15 release page.

Deposit the required funds into its account to cover the draft.

Usually Treasury bills (T-bills).

Futures contracts are similar to forward contracts but are standardized and traded on organized exchanges.

Claims to share in the net income and assets of a business.

Common stock or long-term bond.

It determines the type of financial instruments and markets that are utilized.

It provides a market for trading equity-related derivative products.

Periodic interest.

The holder.

Places where financial instruments are bought and sold.

They regulate markets and may also borrow funds.

A type of preferred stock that does not accumulate unpaid dividends.

A company whose shares are quoted and traded on a formal stock exchange.

A set amount known as the face value.

The speed at which new information flows to the market and is absorbed.

A bond where the issuer promises to make periodic interest payments and pay the face value at maturity.

The issue of new shares to selected institutional investors.

To facilitate the raising of capital, transfer of risk, and international trade.

To facilitate the buying and selling of securities in the primary market.

To meet various financial needs and to manage different types of risks.

Provision of markets for a range of financial securities.

Chapter 4.

Limited to the issue price of shares.

Purchases the commercial paper as an investment.

No, new funds are not raised by the issuing company.

To ensure market participants have confidence in the integrity of market operations.

Savers of funds available for lending.

Agents of investors who match buyers with sellers of securities.

A contract that obligates the holder to buy or sell a specified amount of a financial instrument for a predetermined price at a future date.

Stockholders are the last in line to claim on the assets and income of the corporation.

Voting rights and preemptive rights.

They are bought and sold on the stock exchange like shares in corporations.

Stamps it 'accepted' for a fee.

Short-term funds transferred between financial institutions, usually for one day.

Long-term debt securities issued by corporations and government agencies.

The corporate bond market.

Liabilities and equities on one side, and assets on the other.

On organized exchanges.

Normally less than two weeks.

A short-term debt instrument used to finance the government.

Money markets deal with short-term debt instruments, while capital markets deal with longer-term instruments.

It influences the structure and types of financial markets available.

A financial security that derives its price from an underlying commodity or financial instrument.

Capital market instruments.

At maturity.

Demand and supply.

A type of preferred stock that allows holders to participate in additional earnings.

Banks, insurance companies, mutual funds, and pension funds.

No, it does not have interest payments.

The principal form of equity issued by a corporation, which bestows a claim to residual cash flows and ownership and voting rights.

Stock exchange rules that a listed entity must comply with.

Periodic interest payments made to the bondholder for the life of the bond.

The reinvestment of dividends into the corporation for additional shares.

A financial market where new issues of securities, like bonds or stocks, are sold to initial buyers.

Securities trading system.

Stocks, bonds, currencies, and derivatives.

To enable the trading of previously issued securities.

Limited to any partly paid portion of shares.

State Securities Commission (SSC).

It increases the appeal of buying new shares in the primary market.

Borrowers of funds for capital investment and consumption.

An unconditional promise in writing to pay a specific amount to a beneficiary.

Zero-coupon bonds.

Stockholders are paid dividends from the net earnings of the corporation, usually every quarter.

They link buyers and sellers by buying and selling securities at stated prices.

Open an account.

A long position.

Exchange traded funds (ETFs), real estate investment trusts (REITs), and infrastructure funds.

To meet minimum reserve requirements set by the Federal Reserve.

It is subject to the company's dividend policy.

HOSE and HNX use Viet Nam Securities Depository and Clearing Corporation (VSCD).

A short-term financing option that allows buyers to purchase goods and pay for them later.

To repay the principal amount on a specified future date.

Contracts that represent an asset to one party and a liability to another.

Longer-term debt securities.

An asset that the lender receives if the borrower does not pay back the loan.

They standardize certain features of the contract.

They are sold at a discount and do not make interest payments.

It affects the willingness of investors to provide funds and the types of financial instruments used.

Standardized financial contracts traded on a formal exchange.

$1000.

Yes, in a secondary market.

Now and the future.

A type of preferred stock that can be converted into common stock.

The interest rate applied to the face value of the bond.

Ownership and voting rights, along with a claim to residual cash flows.

A change in a company’s financial forecasts.

To supply capital for corporations.

HOSE (Ho Chi Minh Stock Exchange) and HNX (Hanoi Stock Exchange).

Individuals, institutions, governments, and corporations.

A single payment of cash.

The most shareholders can lose in the event of corporate failure is their original investment.

Regulation and monitoring.

Return, risk, liquidity, and timing of cash flows.

A written order for unconditional payment of a specified amount to a beneficiary.

Margin (currency).

Dealers at different locations buy and sell securities 'over the counter' to anyone willing to accept their prices.

Overseeing and managing investment products for investors.

A short position.

The ratio of share turnover to market capitalization.

Dividends are fixed.

By borrowing or investing in federal funds based on whether they have deficit or excess reserves.

A 2% discount if paid within 10 days, otherwise the full amount is due in 30 days.

To trade all listed securities and derivatives.

Higher yield due to sharing in the profit margin.

The period from the date of issuing to the expiration date.

Debt involves borrowing funds to be repaid with interest, while equity represents ownership in a company.

The set amount paid at maturity.

Non-standardized contracts negotiated between the writer and buyer.

March 10, 2032.

Ability to obtain large amounts of finance at a relatively cheap cost.

A type of preferred stock that can be redeemed by the issuer before its maturity.

A bond with a face value of $1,000 that makes annual coupon payments at a coupon rate of 10% for 10 years.

A significant change in a company's financial status.

A financial market where previously issued securities can be resold.

Australian Securities and Investments Commission (ASIC).

Public issue, family issue, and private placement.

They allocate resources efficiently and provide liquidity.

Face value minus the purchase price.

Debt market, equity market, derivatives market, primary market, secondary market, money market, capital market.

To facilitate trading in financial instruments derived from other assets.

Exchanges have a central location for trading, while over-the-counter markets operate at different locations.

After the expiration date.

A stock exchange in Vietnam.

A place where securities are held.

It requests unconditional payment for a definite amount of money.

Common shareholders.

Number of shares on issue multiplied by the current share price.

A financing arrangement where a supplier provides goods or services with payment due at a later date.

The forces of supply and demand in a competitive market.

Via computer from the broker's office, in order of time received and buy/sell price.

Opportunity cost = (% discount / (100 - % discount)) × (365 / days difference between early and late settlement).

The separation of ownership and control.

Regular interest payments (coupon).

Instruments with a maturity of less than 12 months.

The amount that the issuer must pay at maturity.

Equity claims on the net income and assets.

The increase in the value of the security from purchase to maturity.

10 years.

Risk management (hedging) and speculative instruments.

It facilitates investor diversification and encourages investment in corporate securities.