Investments Ch. 1-3, 28 (Bodie, Kane, Marcus)
1. Investments: - Commitment of current resources in the expectation of deriving greater resources in the future.
2. Real assets: - Assets used to produce goods and services
3. Financial assets: - Claims on real assets of the income generated by them
4. Equity: - An ownership share in a corporation
5. Derivative securities: - Securities providing payoffs that depend on the values of other assets
6. Fixed income (debt) securities: - Pay a specified cash flow over a specific period
7. Agency problems: - Conflicts of interest between managers and stockholders 8. Asset allocation: - Allocation of an
investment portfolio across broad asset classes
9. Security Selection: - Choice of specific securities within each asset class
10. Security analysis: - Analysis of the value of securities
11. Risk return trade off: - Assets with higher expected returns entails greater risk 12. Passive management: - buying and
holding a diversified portfolio without attempting to identify mispriced securities
13. Active management: - attempting to identify mispriced securities or to forecast broad market trends
14. Financial intermediaries: - Institutions that "connect" borrowers and lenders by accepting funds from lenders and
loaning funds to borrowers
15. Investment companies: - Firms managing funds for investors. An investment company may manageseveral mutual
funds.
16. Investment Bankers: - Firms specializing in the sale of new securities to the public, typically by underwriting the issues
17. Primary Market: - a market in which new issues of securities are offered to the public
18. Secondary market: - Previously issued securities are traded among investors
19. Venture capital: - money invested to finance a new firm
20. Private equity: - Investments in companies that are not traded on a stock exchange
21. Securitization: - Pooling loans into standardized securities backed by those loans, which can then be traded like any other
security
22. Systematic risk: - Risk of breakdown in the financial system, particularly due to spillover effects from one market into
others
23. Money markets: - include short-term, highly liquid, and relatively low-risk debt instruments
24. Treasury Bills: - short-term government securities issued at a discount from face value and returning the face amount at
maturity 25. Certificate of deposit: - a bank time deposit
26 Commercial paper: - Short-term unsecured debt issued by large corporations 27. Bankers acceptance: - An order to a
bank by a customer to pay a sum of money at a future date
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1. Investments: - Commitment of current resources in the expectation of deriving greater resources in the future.
2. Real assets: - Assets used to produce goods and services
3. Financial assets: - Claims on real assets of the income generated by them
4. Equity: - An ownership share in a corporation
5. Derivative securities: - Securities providing payoffs that depend on the values of other assets
6. Fixed income (debt) securities: - Pay a specified cash flow over a specific period
7. Agency problems: - Conflicts of interest between managers and stockholders 8. Asset allocation: - Allocation of an
investment portfolio across broad asset classes
9. Security Selection: - Choice of specific securities within each asset class
10. Security analysis: - Analysis of the value of securities
11. Risk return trade off: - Assets with higher expected returns entails greater risk 12. Passive management: - buying and
holding a diversified portfolio without attempting to identify mispriced securities
13. Active management: - attempting to identify mispriced securities or to forecast broad market trends
14. Financial intermediaries: - Institutions that "connect" borrowers and lenders by accepting funds from lenders and
loaning funds to borrowers
15. Investment companies: - Firms managing funds for investors. An investment company may manageseveral mutual
funds.
16. Investment Bankers: - Firms specializing in the sale of new securities to the public, typically by underwriting the issues
17. Primary Market: - a market in which new issues of securities are offered to the public
18. Secondary market: - Previously issued securities are traded among investors
19. Venture capital: - money invested to finance a new firm
20. Private equity: - Investments in companies that are not traded on a stock exchange
21. Securitization: - Pooling loans into standardized securities backed by those loans, which can then be traded like any other
security
22. Systematic risk: - Risk of breakdown in the financial system, particularly due to spillover effects from one market into
others
23. Money markets: - include short-term, highly liquid, and relatively low-risk debt instruments
24. Treasury Bills: - short-term government securities issued at a discount from face value and returning the face amount at
maturity 25. Certificate of deposit: - a bank time deposit
26 Commercial paper: - Short-term unsecured debt issued by large corporations 27. Bankers acceptance: - An order to a
bank by a customer to pay a sum of money at a future date
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