AFM 121 Midterm Exam
Terms in this set (83)
What is the vital function of Help facilitate transfer of capital
financial markets?
Financial instruments (what is actually bought / sold)
What are the three Financial markets (facilitating / buying financial
components of the wealth instruments)
transfer process?
Financial intermediaries (people / companies involved in
financial instruments and markets)
Capital is made up of governments, corporations and
What is capital made up of?
individuals
Direct investment (land, real estate)
How is capital transferred?
Indirect investment (stocks, bonds, t-bills)
When will people transfer When it is easy, cheap, and generates a good return
capital?
Political environment
Economic trends
What does capital flow Fiscal and Monetary policy
depend on? Investment opportunities
Labour force (highly educated / laws governing rights of
labour force)
Retail investors (individuals that buy retail)
Institutional Investors (pension funds and mutual funds)
Who provides capital?
Foreign investors (can include foreign retail, institutional
and government investors)
, Companies and businesses (earn money through
internally through existing operations and reinvest the
money) (raise money by issuing stocks/bonds)
Who uses capital?
Government (t bills, longer term debt) (spend on all
forms of government spending that aren't covered by
tax and other revenues)
Debt
Equity
What are the different kinds
Investment Funds
of financial instruments?
Derivatives
Private equity
Fast
What makes a market
Cheap
efficient?
Liquid
Securities are sold by issuers for the first time
What are primary markets?
Issuer receives money from this sale
Where securities previously issued are bought and sold
What are secondary
markets?
Funds do not go to issuer
How are regulations set for Regulations are meant to be structured such that market
financial intermediaries? efficiency is a by-product of this self interest
Where all transaction converge in one location (TSX, TSX
What are auction markets?
Venture Exchange)
Transaction fees
How does a stock
exchange make money?
Initial listing fees
Physical locations to trading systems
What is the latest trend in
stock exchanges?
Speed and cost efficiency are crucial
Terms in this set (83)
What is the vital function of Help facilitate transfer of capital
financial markets?
Financial instruments (what is actually bought / sold)
What are the three Financial markets (facilitating / buying financial
components of the wealth instruments)
transfer process?
Financial intermediaries (people / companies involved in
financial instruments and markets)
Capital is made up of governments, corporations and
What is capital made up of?
individuals
Direct investment (land, real estate)
How is capital transferred?
Indirect investment (stocks, bonds, t-bills)
When will people transfer When it is easy, cheap, and generates a good return
capital?
Political environment
Economic trends
What does capital flow Fiscal and Monetary policy
depend on? Investment opportunities
Labour force (highly educated / laws governing rights of
labour force)
Retail investors (individuals that buy retail)
Institutional Investors (pension funds and mutual funds)
Who provides capital?
Foreign investors (can include foreign retail, institutional
and government investors)
, Companies and businesses (earn money through
internally through existing operations and reinvest the
money) (raise money by issuing stocks/bonds)
Who uses capital?
Government (t bills, longer term debt) (spend on all
forms of government spending that aren't covered by
tax and other revenues)
Debt
Equity
What are the different kinds
Investment Funds
of financial instruments?
Derivatives
Private equity
Fast
What makes a market
Cheap
efficient?
Liquid
Securities are sold by issuers for the first time
What are primary markets?
Issuer receives money from this sale
Where securities previously issued are bought and sold
What are secondary
markets?
Funds do not go to issuer
How are regulations set for Regulations are meant to be structured such that market
financial intermediaries? efficiency is a by-product of this self interest
Where all transaction converge in one location (TSX, TSX
What are auction markets?
Venture Exchange)
Transaction fees
How does a stock
exchange make money?
Initial listing fees
Physical locations to trading systems
What is the latest trend in
stock exchanges?
Speed and cost efficiency are crucial
