FINA-3311 EXAM 1 LATEST UPDATE
How is capital transferred in financial market - ANSWER direct transfer, indirect transfer
investment banker, indirect transfer financial intermediary
Direct transfer - ANSWER firm seeking funds directly approaches a wealthy investor
Indirect (investment banker) - ANSWER acts as a link between the firm and the
investors
Indirect (financial intermediary) - ANSWER collects funds from savers in exchange of its
own securities
Primary Market - ANSWER new issues are sold to buyers
Seasoned Equity Offering (SEO) - ANSWER sale of additional shares by a traded
company whose shares are already publicly traded
Secondary Market - ANSWER previously issued securities are traded
Money Market - ANSWER short term debt instruments
Capital Market - ANSWER long term financial securities
Spot Market - ANSWER transaction takes place on the spot at current market price
Futures Market - ANSWER agreement to buy/sell in the future at a price that is set
today
Functions of an investment banker - ANSWER underwriting, distributing, advising
Income statement - ANSWER revenue, cost of goods sold, operating expenses,
financing costs, tax expenses
How is capital transferred in financial market - ANSWER direct transfer, indirect transfer
investment banker, indirect transfer financial intermediary
Direct transfer - ANSWER firm seeking funds directly approaches a wealthy investor
Indirect (investment banker) - ANSWER acts as a link between the firm and the
investors
Indirect (financial intermediary) - ANSWER collects funds from savers in exchange of its
own securities
Primary Market - ANSWER new issues are sold to buyers
Seasoned Equity Offering (SEO) - ANSWER sale of additional shares by a traded
company whose shares are already publicly traded
Secondary Market - ANSWER previously issued securities are traded
Money Market - ANSWER short term debt instruments
Capital Market - ANSWER long term financial securities
Spot Market - ANSWER transaction takes place on the spot at current market price
Futures Market - ANSWER agreement to buy/sell in the future at a price that is set
today
Functions of an investment banker - ANSWER underwriting, distributing, advising
Income statement - ANSWER revenue, cost of goods sold, operating expenses,
financing costs, tax expenses
