Nurseeve

Default Risk - Risk that a borrower will not make promised payments Liquidity Risk - Risk of recieving less than fair value for an investment if it must be sold for cash quickly Required Interest Rate on A Security - = Nominal Interest Rate + Default Risk Premium + Liquidity Premium + Maturity Risk Premium

Bond Indenture -Contract that specifies all the rights and obligations of the issuer and owners of a fixed income security. Negative Covenants - Prohibitions on the borrower.

Price Elasticity of Demand Formula - (% Change in Quantity Demanded) / (%t Change in Price) Cross Elasticity of Demand Formula - (% Change in Quantity Demanded) / (% Change in Price of Substitute or Complement)

Current Ratio -Current Assets divided by current liabilities Quick Ratio -Cash plus marketable securities plus receivables divided by current liabilities

Can you initiate coverage on a company that is a potential client? - Yes - as long as the recommendation is not unjustifiably favorable Tender Offers - Mat., non-pub info -> can't use! To be GIPS compliant, a firm must adopt: -the broadest definition of the firm *presented annually, to all clients

Scarcity - A situation in which unlimited wants exceed the limited resources available to fulfill those wants Production Possibilities Frontier (PPF) - A curve showing the maximum attainable combinations of two goods that can be produced with available resources and current technology

allocative efficiency - when the mix of goods produced represents the mix that society most desires budget constraint - all possible consumption combinations of goods that someone can afford, given the prices of goods, when all income is spent; the boundary of the opportunity set

circular flow diagram - visual model of economy that shows how money flows through markets among firms and households factors of production - inputs such as labor, land, and captial

Economics - the study of how humans make decisions in the face of scarcity Scarcity - human wants for goods, services and resources exceed what is available

Scarcity - the limited nature of society's resources Economics - the study of how society manages is scare resources