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Definition
| The problem created by asymmetric information before a transaction occurs when the people who are most undesirable from the other partys point of view are the ones who are most likely to want to engage in the financial transaction |
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Definition
| turning risky assests into sage assets |
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Term
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Definition
| the unequal knowledge that each party to a transaction has about the other party |
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Definition
| agents for investors who help match buyers and sellers |
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Term
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Definition
| wealth that is used to produce more wealth |
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Term
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Definition
| a financial market in which longer term debt and equity instruments are traded |
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Term
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Definition
| can arise when a financial institution provides multiple services, lending to misleading or concealing of some information |
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Term
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Definition
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Term
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Definition
| those who buy and sell securities at a specified price for buyers and sellers |
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Term
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Definition
| occurs when an institution is unable to make interest payments or pay off the amount owed on a debt instrument at maturity |
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Term
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Definition
| investing in a portfolio whose returns do not always move together, with the result that overall risk is lower than for individual assets |
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Term
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Definition
| periodic payments made to shareholders |
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Term
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Definition
| the reduction in transaction costs per dollar of transaction as the scale of transactions increases |
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Term
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Definition
| the ability to use one resource to provide many different products and services |
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Term
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Definition
| claims to share in the net income and assets of a corporation such as common stock |
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Term
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Definition
| bonds denominated in a currency other than that of the country where they were sold |
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Term
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Definition
| U.S. dollars deposited in foreign banks outside the united states or in foreign branches of u.s. banks |
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Term
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Definition
| secondary markets in which buyers and sellers of securities meet in one central location to conduct trades |
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Term
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Definition
| the interest rate banks charge other banks on over night loans |
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Term
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Definition
| the process of indirect finance whereby financial intermediaries link lender- savers and borrower-spenders |
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Term
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Definition
| a widespread collapse of financial markets and intermediaries |
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Term
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Definition
| firms that assist in the initial sale of securities in the primary market |
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Term
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Definition
| debts of finanacial obligations that must be repaid |
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Term
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Definition
| easily converted into cash |
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Term
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Definition
| the expiration date of a debt instument |
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Term
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Definition
| a financial market in which only short term debt instuments are traded |
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Term
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Definition
| the risk that one party to a transaction will engage in behavior that is undesirable from the other partys point of view |
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Term
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Definition
| a secondary market in which dealers at different locations who have an inventory of securities stand ready to buy and sell securities to anyone who comes to them and is willing to accept their prices |
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Term
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Definition
| a collection or group of asseets |
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Term
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Definition
| a finanacial market in which new issues of a security are sold to initial buyers |
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Term
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Definition
| occurs when firms create and sell assets that are less risky and use proceeds to buy riskier assets |
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Term
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Definition
| a financial market in which securities that have previously been issued can be resold |
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Term
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Definition
| savings and loans, mutual savings bank, and credit unions |
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Term
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Definition
| the time and money spent trying to exchange financial assets, goods, and services |
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Term
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Definition
| guaranteeing prices on securities to corporations and then selling the securities to the public |
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