Chpt three - 4/12/11 SECURITY TYPES.. 4/12/11 Chapter...

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Unformatted text preview: 4/12/11 SECURITY TYPES.. 4/12/11 Chapter Three: Overview of Security Types  Interest-bearing Money Market Instruments Fixed-Income  Equities Common Stock Preferred Stock 4/12/11 Money Market Instruments  Short-term IOUs sold by Banks, Corporations, and Government.  Generally under 1 year in maturity. Some Money Market Instruments:  Treasury Bills  Certificates of Deposit (CDs) 4/12/11 Money Market Yields........  Discount Yield: (T-Bills)  Add-on Yield: (CDs) 4/12/11 Fixed Income Securities:  Notes One to Ten Year Maturity  Bonds Greater than Ten Year Maturity  Securities that promise fixed payments (coupon interest; semi-annual plus face value at maturity) 4/12/11 Fixed Income Security Types:  U.S. Treasuries (Notes & Bonds)  Corporates  Municipals  Agencies (Fannie, Freddie, Sallie) 4/12/11 Fixed Income Price Quotes: Issuer Name Symbol Coupon Maturity Rating High Low Last Change Yield Goldman Sac GS.WL 5.625% Jan2017 A1/A+ 97.615 94.141 94.691 -0.789 6.382 So if you purchased a bond with $1000 face value per bond, your cost would be $946.91. You would receive semi-annual coupon payments of $28.1250 (twice per year so $56.25 per annum). Remember, price moves in the opposite direction of yield, so as prices rise, yields falland as prices decline, yields rise. 4/12/11 EQUITIES..  Common Stockownership in a corporation through shares of stock.  Two Advantages: Cash Dividends Price Appreciation (Hopefully) 4/12/11 Common Stock: Some Key  Float: The total number of tradable shares.  Volume: The number of Shares traded in a given day.  P/E Ratio: (Also known as a stocks Multiple) ..Stock Price/Earnings  Short Interest: Number of shares that have been shorted and remain open positions....
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This note was uploaded on 04/11/2011 for the course FIN 321 taught by Professor Blose during the Winter '07 term at Grand Valley State University.

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Chpt three - 4/12/11 SECURITY TYPES.. 4/12/11 Chapter...

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