Corporate Finance
focuses on financial decision making by a firms management
Investments
various types of financial instruments (stocks, bonds, etc)
Banking or Financial Institutions
make money by paying depositors a smaller interest rate than the interest rate charged to borrowers
Treasury Securities
generally bonds that are issued by the US government
Corporate Bonds
firms borrowing from the public
Stocks
a share of ownership in a company
Primary financial markets
markets where securities are first issued
Syndicate
a group that is temporarily formed to handle a bond or stock issue: generally large investment bank or
institutional investors
Underwriter
responsible for determining the value of the security; may purchase all the securities & then resale to
investors
Competitive sale
underwriters submit bids offering highest price/lowest interest rate; underwriter resales a slightly higher
price
Negotiated sale
underwriters submit bids, go thru interview to be selected
Initial Public Offering (IPO)
first time selling of stocks to the public; occurs in primary market
Secondary financial markets