19 terms

Securities Markets

Flash cards for FIN 352 - Professor Dow Based on Chapter 4 of Jones "Investments"
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Primary Market
The market for new issues of securities. A way to raise money for demanders of funds.
Initial Public Offering
Common stock shares being sold to the public for the first time.
Investment Bank
Firm that specializes in the sale of new securities to the public
Underwrite
The process by which investment banks purchase on issue of securities from a firm and resell it to the public
Syndicate
A group of investment banks that collectively issue a security
Private Placement
New securities issues are sold directly to financial institutions, bypassing the open market.
Secondary Markets
Market where existing securities are traded amount investors. Does not raise money for demanders of funds.
New York Stock Exchange
The major secondary market for the trading of equity securities. Securities are traded electronically and in person on the "trading floor".
NASDAQ Stock Market
Fully electronic equity securities market. Home to a large number of technology companies.
Over-the-counter (OTC) Market
A decentralized market for securities not listed on an exchange.
Market Maker
An individual who makes a market in a stock by buying from and selling to investors.
Dow Jones Industrial Average (DJIA)
A price-weighted index of 30 large, well-established companies that is sometimes used as a measure of stock market activity.
Price-Weighted Index
An index that gives more important to high-priced stocks than low-price stocks.
Standard & Poor's 500 Composite Index (S&P 500)
A capitalization-weighted index of 500 large-cap companies that is sometimes used as a measure of stock market activity.
Capitalization-Weighted Index
An index that gives more importance to companies with larger market capitalizations.
NASDAQ Composite Index
Measures all common stocks traded on the NASDAQ stock exchange
Some other indexes of note
Russell 2000 - Small-Cap stocks
S&P 400 - Mid-Cap stocks
Wilshire 5000 - Total US Stock Market
Bond Market
Primarily a dealer-to-dealer market. Only a relatively small number of bonds are listed on exchanges
International Indexes
DAX (Frankfurt)
FTSE (London)
NIKKEI (Tokyo)