secondary market
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Trading markets that facilitate the exchange of existing financial instruments
among investors
preferred stock
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A special type of stock whose owners, though not generally having a say in
running the company, have a claim to profits before other stockholders do.
*No voting rights
*pays a dividend (not guaranteed)= stated as a percentage of par value
- dividends are paid to preferred shareholders before common
shareholders
Sponsored ADRs
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Issued with the cooperation of the foreign company and carry all the rights
of the common stock. Traded on the U.S. exchanges
For corporate and municipal bonds, a bonds price may also be expressed in terms of
points
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- Each point is equal to 1% of the bonds par value, or $10
- Corporate and municipal bonds trade in increments of 1/8 or a point, or
$1.25
Investment Company Act of 1940
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, Congressional legislation regulating companies that invest and reinvest in
securities. The act requires an investment company engaged in interstate
commerce to register with the SEC.
preemptive right offering
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A Shareholders rights to maintain percentage of ownership no dilution
- Distributed through a rights offering
- One right for each share owned
Discounted (Subscription)
-A shareholders exercise rights at a price thats below the current market
value prior to a public offering
- Immediate intrinsic value
-Short term= must be exercised within 4 to 6 weeks
mortgage-backed securities
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A mortgage-backed security (MBS) is a type of asset-backed security that
is secured by a mortgage or collection of mortgages. The mortgages are
sold to a group of individuals (a government agency or investment bank)
that securitizes, or packages, the loans together into a security that
investors can buy.
DOJ (Department of Justice)
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, Can prosecute those that break securities laws
Conversion ratio ex:
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XYZ Corp
6% debenture
Market price $1,100 and convertible at $20
1000(par value)/ 20(conversion price) = 50 shares
Credit Risk
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- Is a recognition that an issuer may default and may not be able to meet its
obligation to pay interest and principal to the bondholders
- Issuers that are considered this must pay a higher interest rate in order to
induce investors to purchase their bonds
- Credit risk is more difficult to evaluate when issued by a corporation or a
municipality
Why are investors attracted to bonds?
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- Greater safety than stocks
- Typically, consistent income in the form of interest and a known maturity
Par value: Principal (face value of the bond)
Give this one a try later!
Trading markets that facilitate the exchange of existing financial instruments
among investors
preferred stock
,Give this one a try later!
A special type of stock whose owners, though not generally having a say in
running the company, have a claim to profits before other stockholders do.
*No voting rights
*pays a dividend (not guaranteed)= stated as a percentage of par value
- dividends are paid to preferred shareholders before common
shareholders
Sponsored ADRs
Give this one a try later!
Issued with the cooperation of the foreign company and carry all the rights
of the common stock. Traded on the U.S. exchanges
For corporate and municipal bonds, a bonds price may also be expressed in terms of
points
Give this one a try later!
- Each point is equal to 1% of the bonds par value, or $10
- Corporate and municipal bonds trade in increments of 1/8 or a point, or
$1.25
Investment Company Act of 1940
Give this one a try later!
, Congressional legislation regulating companies that invest and reinvest in
securities. The act requires an investment company engaged in interstate
commerce to register with the SEC.
preemptive right offering
Give this one a try later!
A Shareholders rights to maintain percentage of ownership no dilution
- Distributed through a rights offering
- One right for each share owned
Discounted (Subscription)
-A shareholders exercise rights at a price thats below the current market
value prior to a public offering
- Immediate intrinsic value
-Short term= must be exercised within 4 to 6 weeks
mortgage-backed securities
Give this one a try later!
A mortgage-backed security (MBS) is a type of asset-backed security that
is secured by a mortgage or collection of mortgages. The mortgages are
sold to a group of individuals (a government agency or investment bank)
that securitizes, or packages, the loans together into a security that
investors can buy.
DOJ (Department of Justice)
Give this one a try later!
, Can prosecute those that break securities laws
Conversion ratio ex:
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XYZ Corp
6% debenture
Market price $1,100 and convertible at $20
1000(par value)/ 20(conversion price) = 50 shares
Credit Risk
Give this one a try later!
- Is a recognition that an issuer may default and may not be able to meet its
obligation to pay interest and principal to the bondholders
- Issuers that are considered this must pay a higher interest rate in order to
induce investors to purchase their bonds
- Credit risk is more difficult to evaluate when issued by a corporation or a
municipality
Why are investors attracted to bonds?
Give this one a try later!
- Greater safety than stocks
- Typically, consistent income in the form of interest and a known maturity
Par value: Principal (face value of the bond)
