Insider Trading
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-Officers, directors, major stockholders must report all transactions in a
firm's stock
-Insiders do exploit their knowledge
,Passive Management
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-Holding a highly diversified portfolio
-No attempt to find undervalued securities
-No attempt to time the market
Sarbanes-Oxley Act
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-Tighten the rules of corporate governance
Dark Pools
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Trading venues that preserve anonymity, mainly relevant in block trading
Treasury Bond
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-Maturities from 10 to 30 years
,Brokered Market
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Brokers search out buyers and sellers
Reason for Reverse Share Splits
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-No one wants to buy penny stocks (under $1)
-Poor reputation for being frauds
-Difficult to get on a stock exchange
Price-Contingent Order
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-Traders specify buying or selling price
Securitization
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, Buying mortgage loans from originators and bundling them into mortgage-
backed securities
Covariance
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Average cross-product of the deviations from the mean
-Shows if 2 stocks move together or opposite from one another
Effective Annual Rate
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-If you invest $1 at the beginning of the year, how much will you have at the
end of the year?
ex: 10% compounding semi annually
--> $1 1.1 1.1 =1.21
-->EAR = 21%
Option vs. Futures Contract
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Give this one a try later!
-Officers, directors, major stockholders must report all transactions in a
firm's stock
-Insiders do exploit their knowledge
,Passive Management
Give this one a try later!
-Holding a highly diversified portfolio
-No attempt to find undervalued securities
-No attempt to time the market
Sarbanes-Oxley Act
Give this one a try later!
-Tighten the rules of corporate governance
Dark Pools
Give this one a try later!
Trading venues that preserve anonymity, mainly relevant in block trading
Treasury Bond
Give this one a try later!
-Maturities from 10 to 30 years
,Brokered Market
Give this one a try later!
Brokers search out buyers and sellers
Reason for Reverse Share Splits
Give this one a try later!
-No one wants to buy penny stocks (under $1)
-Poor reputation for being frauds
-Difficult to get on a stock exchange
Price-Contingent Order
Give this one a try later!
-Traders specify buying or selling price
Securitization
Give this one a try later!
, Buying mortgage loans from originators and bundling them into mortgage-
backed securities
Covariance
Give this one a try later!
Average cross-product of the deviations from the mean
-Shows if 2 stocks move together or opposite from one another
Effective Annual Rate
Give this one a try later!
-If you invest $1 at the beginning of the year, how much will you have at the
end of the year?
ex: 10% compounding semi annually
--> $1 1.1 1.1 =1.21
-->EAR = 21%
Option vs. Futures Contract
Give this one a try later!
