csc volume 1 Questions and Answers

csc volume 1 Questions and Answers cash basis of accounting less than 20% of a subsidiary public float -part of issued shares that are outstanding and available for trading by the public -excludes shares owned in large blocks by institutions. Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:01 / 0:15 Full screen Brainpower Read More number of shares outstanding to be lower than the number of shares issued company redeemed shares advantage for an issuer to use the Short Form Prospectus System shortens the time period by which a new issue may be offered to the public over-allotment option dealer initially sells more stock than the original offer by the issuer to the public ceiling imposed on the total amount of bids for a government bond offering submitted by any primary dealer 40% yield will be awarded to the firms that submitted a non-competitive tender average of 5 successful bids allow significant news to be reported and widely disseminated temporary halt on trading 3 characteristics of capital mobile sensitive to the environment scarce factors that affect capital political economic fiscal monetary risk labour force only source of capital is savings retail investors individual investors who buy and sell securities for their own personal accounts, and not for another company or organization indirect investment occurs when the saver buys the securities issued by governments and corporations, who in turn use the funds for direct productive investment government makes use of four main instruments treasury bills marketable bonds canada savings bonds (CSBs) canada premium bonds (CPB) instalment / serial debentures municipalities use _____ to spread long term projects over several years instalment / serial debentures 3 components of the financial industry markets instruments intermediaries open-end fund/ mutual fund -fund raises capital by selling shares/units to investors -as unit holders, investors receive part of the money made from the fund's investments Derivatives products based on or derived from an underlying instrument like a stock or index Most common derivatives options forwards Private Equity financing of firms unwilling or unable to find capital using public measures venture capital invest when business produce little of no cash flow, unproven technology etc. and have little/ no collateral Several methods by which private investors finance firms LBO growth capital turnaround early stage VC late stage VC distressed debt distressed debt acquisition purchase of debt securities of private or public companies that are trading below par due to financial troubles at the firm private equity investors are typically -Public pension plans -Private pension plans -Endowments -Foundations -High net worth investors Role of private equity in a portfolio return enhancement (reward for accepting much lower liquidity typical of private equity) portfolio diversification efficient markets speedy transactions low transaction costs high degree of liquidity effective regulation Primary Market -New securities are sold by companies and governments to investors for the first time. -Companies raise capital by selling stocks or bonds which governments raise capital by selling bonds Secondary Market Investors trade securities that have already been issued by companies and governments In this market, buyers and sellers trade among each other at a price that is mutually beneficial to both parties. In auction markets buyers enter bids and sellers enter offers for a stock bid Highest price a buyer is willing to pay for the security being quoted ask lowest price a seller will accept spread difference between the bid and ask prices liquid market frequent sales narrow price spread between bid and ask prices small fluctuations from sale to sale. Canada has 5 exchanges Toronto Stock Exchanges (TSX) TSX Venture Exchange Montreal Exchange (Bourse de Montréal MX) (owned by TMX group) Canadian National Stock Exchange (CNSX) ICE Futures Canada IIROC Investment Industry Regulatory Organization of Canada UMIR Universal Market Integrity Rules dealer market, over-the-counter (OTC) or as unlisted markets. a negotiated market Market Makers monitoring the opening and trading to ensure that orders are properly executed maintaining a continuous two-sided market at an agreed upon maximum spread throughout the day executing all tradable orders that meet a maximum number of shares as agreed upon with the exchange. dollar volume of dealer markets is much larger unlisted market more speculative, and in most cases offer lower liquidity than listed securities OTC derivatives market Dominated by financial institutes such as banks and brokerage houses open 24 hours a day products can be custom designed by the buyer and seller. CUB Canadian Unlisted Board Inc where unliment securities must be reported in ONtario OSC Ontario Securities Commission QTRS Quotation and Trade Reporting Systems Alternative Trading Systems (ATS) are privately owned computerized trading facilitates that match buy and sell orders for securities traded outside of recognized exchanges. can be owned by inimical brokerage firms or by groups of brokerage firms. have the potential to threaten market stability die to lessened market transparency, cross-border trading issues and technological glitches such as insufficient system capacity. members and regulated by IIROC taking market share away from traditional market exchanges