Financial Markets and Securities: SEC Filings, Market Efficiency and Time Value Concepts

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Finance - Personal Finance

michael1tekrzp Created by 10 mon ago

Cards in this deck(100)

The annual audited financials filed with the SEC are known as _____

The quarterly audited financials filed with the SEC are referred to as _____

The SEC rule for selling securities to an 'accredited investor' is known as _____

A current liability representing money owed to suppliers is called _____

The four principles of financial decision-making include Efficient Markets, Time Value of Money, Risk Aversion, and _____

Efficient financial markets require being competitive, liquid, transparent, and _____

The principle that the value of money depends on when you receive it is known as the _____

In efficient markets, market prices reflect the 'intrinsic value' of the security, meaning they are an accurate basis for _____

Cash received today is referred to as _____

Cash received in the future is referred to as _____

The metric that 'translates' between Present Value and Future Value, representing the rate of increase in a cash balance per year, is the _____

The interest rate on US treasury securities, often referred to as the 'risk-free rate', is used to measure _____

The required return line is set by market trades, varies in shape and position, and is always _____

Investors require higher returns to compensate for higher risk, which is known as the _____

The minimum 'profit' needed to attract investors is referred to as the _____

The risk that a firm may go bankrupt or its stock price might fall is known as _____

Accounting measures previous activities and historical costs, while finance focuses on future transactions and _____

Finance requires decision-making under uncertainty and involves projections of future cash flow and _____

An investor with high risk aversion will likely invest in a _____ because it is considered 'risk-free'

An investor who is more risk tolerant will likely invest in _____, which are considered very risky

Firms are financed by selling bonds and stocks to investors in order to _____

A bond is essentially a 'loan' from an investor to a firm, characterized by _____

The characteristics of a bond include a principal amount, interest as a legal obligation, and _____

When an investor buys stock, they become a part owner of the company, which is a characteristic of _____

The characteristics of stocks include a principal price, dividends at the firm's discretion, and _____

Bonds provide more certain cash flows to investors, which results in a _____

Types of corporations include those that produce products and services and those that manage _____

Examples of corporations that produce products and services include Walmart, GM, and _____

Examples of investment managers include BlackRock, Fidelity, and _____

To raise cash, corporations sell bonds and stocks, which are considered _____

Investment managers buy bonds and stocks to _____ cash

In 'Primary' markets, corporations like Walmart sell, and investment managers like BlackRock _____

In 'Secondary' markets, investment managers like BlackRock sell, and others like Fidelity _____

Types of markets include the New York Stock Exchange, NASDAQ, and _____

The New York Stock Exchange functions as a competitive auction to set _____

NASDAQ functions as a dealer market where transactions are often negotiated _____

Citadel functions as a wholesaler with no transaction fee, making it _____

Institutional Dealer Dark Pools handle large trades with no information posted, making them _____

The basic Time Value of Money (TVM) logic is expressed as FV = PV x (1 + _____)

Interest equals profit per year or the increase in value per year, which is also known as _____

The 'Back to Present' equation is used to compute present value as PV = FV / (1 + _____)

To calculate Future Value from Present Value, you multiply by (1 + _____)

To calculate Present Value from Future Value, you divide by (1 + _____)

The interest rate 'translates' between Future Value and Present Value, acting as a _____

The elements of Time Value of Money include Present Value, Future Value, Payment, Periods, and _____

A single lump of cash received today is referred to as _____

A single lump of cash to be received in the future is referred to as _____

A series of lumps of cash received per period, such as $100 a year for 5 years, is known as _____

The number of payment periods, which can be annual or semiannual, is referred to as _____

The interest rate per payment period is known as _____

Payments, periods, and interest rates are not necessarily annual and must be adjusted if not _____

Payments received at the end of a period are characteristic of an _____

Payments received at the beginning of a period, requiring a calculator to be set to begin mode, are characteristic of an _____

An endless stream of payments, often indicated by the word 'forever', is known as a _____

An endless stream of increasing payments is referred to as a _____

Bond prices are based on the principle of _____

The legal provisions of a bond indenture include the face value, which is the dollar amount of corporate debt to investors, usually _____

The yield does NOT equal the interest rate; instead, the coupon rate equals the _____

The interest rate used to calculate annual interest payments to investors is known as the _____

The schedule of days for interest payments, usually semi-annually, is part of the bond indenture's _____

The date at which a bond matures and the face value is repaid to the investor is known as the _____

All bonds are _____ of the corporation that must be met to avoid bankruptcy

A bond's price and yield are set by supply and demand in _____

In bond valuation, the face value is also known as the _____

In bond valuation, the coupon rate is equivalent to the _____

Yield equals the investor's profit per period or the rate of increase in value per period, also known as _____

At par price, the yield equals the _____

In a secondary market, bonds are purchased at a _____

A discount price occurs when the price is less than the _____

The relationship between price and yield is inverse; when the required return decreases, the price goes up and the yield goes _____

At a discount price, the yield is greater than the _____

The price of a bond is calculated as the cash flows divided by (1 + _____)

The payment (PMT) equals the coupon rate multiplied by the _____

Duration is a measure of bond price volatility, indicating how much the price will change with _____

Corporate bond credit ratings of AAA indicate a close to 0% probability of default, exemplified by companies like _____

Corporate bond credit ratings of BBB indicate a roughly 5% probability of default, exemplified by companies like _____

If a firm's financial condition changes, a credit downgrade will cause the price to drop as the required return _____

A bond's required yield includes a 'risk premium' over treasury yields, which are factors affecting _____

AAA-rated bonds are less risky than BBB-rated bonds, which affects a bond's required _____

Long-term bonds have more price volatility, which is a factor affecting a bond's required _____

Secured bonds have lower yields due to no default risk, which is a factor affecting a bond's required _____

Municipal bonds issued by state-local governments are tax-exempt, affecting a bond's required _____

An ordinary bond pays interest semi-annually and returns the principal at _____

An amortizing bond includes monthly payments of interest plus partial principal, with the principal equaling zero at _____

Mortgage securities are pools of amortizing mortgage loans, which are a type of _____

APR is the 'quoted' annual rate, while APY is the 'effective yield' incorporating the periodicity of _____

APY is not used in corporate bond markets, but it is used in _____

APY is used in consumer finance, while APR is more common in _____

The more compounding periods there are, the higher the _____

The stock price equals the present value of cash to the investor, using required returns as the _____

Cash to the investor includes dividends paid and the _____

In terminal cash flow, if the book value is greater than the salvage value, then the buyer has to pay the _____

A tax shield is a write-off of taxes, effectively providing a _____

You should accept a project when the Net Present Value (NPV) is positive, zero, or the IRR is greater than a WACC of _____

You should reject a project when the Net Present Value (NPV) is _____

The three analytical frameworks for stocks include the Capital Asset Pricing Model, Gordon Dividend Growth Model, and _____

In stock calculations, the Capital Asset Pricing Model (CAPM) is associated with the keyword _____

In stock calculations, the Gordon Growth Model is associated with the keyword _____

In stock calculations, the Single Holding Period is associated with the keyword _____

The average required return on stocks is known as the _____

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