CMA (Certified Management Accountant) - Part II SU2

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Money Market Securities

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Terms in this set (66)

a. Govt. Treasury Bills
b. Govt Treasury Notes and Bonds
c. Federal Agency Securities
d. Short-term tax-exampt securities
e. Commercial Paper
f. Certificates of Deposit
g. Repurchase Agreements
h. Eurodollar CDs
i. Bankers' acceptances

Primary Markets

Are markets in which corporations and governmental units raise new capital by making IPOs. The issuer receives the proceeds of sale in a primary market.

Secondary markets

Provide for trading of previously issued securities among investors. Auction markets (NYSE) and dealer markets (OTC).

Financial Intermediaries

Specialized firms that help create and exchange the instruments of financial markets. Increase the efficiency of financial markets through better allocation of financial resources.

1. Commercial Banks
2. Life insurance companies
3. private pension funds
4. Nonbank thrift institutions, such as savings banks and credit unions
5. State and local pension funds
6. Mutual Funds
7. Finance Companies
8. Casualty insurance companies
9. Money market funds
10. Mutual savings banks
11. Credit unions
12. Investment bankers

Efficient Markets Hypothesis

Current stock prices immediately and fully reflect all relevant information. Hence, the market is continuously adjusting to new information and acting to correct pricing errors.

1. Strong Form: all public and private information
2. Semistrong Form: All publicly available data
3. Weak Form: Prices reflect all recent past price movement