FIn 401- test 1 notecard

FIn 401- test 1 notecard - 1)Real Asset assets used to...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
1)Real Asset - assets used to produce goods and services. Generate net income to the economy(land,equipment,education). Financial Assets - claims on real assets(stocks,bonds,cash). Agency Problem - managers avoid risky projects to protect their own jobs. Financial Intermediaries- Connection btw the firm and the individual. Half of all stocks are held by large institutions like pension and mutual funds. Investment Bankers- firms specializing in the sale of new securities. Primary Market =new security issues to the public. Secondary Markets- trade previously issued securities among themselves. Securitization- allow lenders to remove loans from their portfolios by selling bonds backed by T-Bonds. 2)Money Market- sector of the debt markets, includes short-term, highly liquid, low risk debt instrument. Bond Market- long term borrowing that trade, comprised of fixed income. Municipal Bonds - tax-exempt, low yields, Taxable returns - 6%( bracket)=, TaxFree- 4%/(1-TB=, Corporate Bonds- long term debt,
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/15/2011 for the course FIN 401 taught by Professor Staff during the Spring '08 term at Miami University.

Ask a homework question - tutors are online