D076 Finance Skills for Managers)- Module 2 PASSED

A local start-up company just hit its five-year anniversary and is planning an initial public offering sometime this year. In order to issue public stock, which market will the company use? - Primary market When a company issues stock for the first time to raise capital, shares must initially be sold through a primary market. About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while the 10-year Treasury note has an interest rate of 2.28%. What does this information indicate about the future economy? - It may indicate an economic downturn. Since the long-term Treasury interest rate is lower than the short-term rate, it has an inverted yield curve, which may indicate an economic downturn. Auction market - has a physical location where prices are determined by investors' willingness to pay (EX) New York Stock Exchange (NYSE) bid-ask spread - the difference between the bid price and the asked price Capital Market - market in which money is lent for periods longer than a year coincident indicators - collected, used, and analyzed as economic shifts happen