Exam (elaborations)
FIN 320 Midterm Questions And Answers Latest Update
- Course
- FIN 320
- Institution
- Southern New Hampshire University
FIN 320 Midterm Questions And Answers Latest Update
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Solution 2024/2025Pepper
FIN 320 Midterm Questions And Answers
Latest Update
Security
something that can be easily traded (bonds, stocks)
Are loans considered securities?
No, they are not easily tradeable
Real assets
things used to produce goods and services
Types of financial assets
fixed income/debt securities, equity/stocks, derivative securities
Fixed income/debt securities
debt instruments (corporate bond)
Equity
represents ownership share in a firm (common stock)
Derivative securities
something that derives its value from another security (futures, forwards)
Floating rates
interest rate can reset
Currency
something that can be used to store value or facilitate transaction
Exchange rate
rate at which you exchange one currency for another
, Solution 2024/2025
Pepper
Commodity
something that is undifferentiated product (corn, wheat, natural gas, gold,
silver)
Stock variable
At a certain point in time (balance sheet)
Flow variable
Taken over a period of time (income statement / statement of cash flows)
Agency problems/Principal agent problems
conflicts of interest between managers and owners (shareholders)
Expectations
Asset prices/stock prices are affected by...
Rational expectations
people take in all available information when trying to value financial assets
Efficient markets
only news moves the price of an asset, you shouldn't be able to make
money as a technical trader
ETF (Exchange Traded Fund)
bundle of stocks or bonds that are in an index that tracks the overall
movement of a market, but unlike a mutual fund can be traded like a stock
AUM (Assets Under Management)
the total market value of assets that an investment company or financial
institution manages on behalf of investors
NAV (Net Asset Value)
the value per share of a mutual fund; found by dividing the total value of all
the holdings of the fund by the number of shares outstanding
Mutual fund
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