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Lets do these FIM terms :) Theres a lot to go through but if we work together we can lighten the load
Key Terms – Page 27
Financial intermediary (or financial institution)
Surplus spending unit (SSU)
Deficit spending unit (DSU)
Financial claim
Marketability
Direct financing
Financial intermediation (or indirect financing)
Financial market
Direct claim
Private placement
Investment banker
Underwriting
Underwriting spread
Broker
Dealer
Bid price
Ask price
Bid-ask spread
Disintermediation
Commercial paper
Primary financial market
Secondary financial market
Over-the-counter market
Futures market
Futures contract
Option market
Options contract
Eurodollar market
Eurobond market
Money Markets
Treasury bills
Negotiable certificates of deposit
Federal funds
Fed funds market
Capital markets
Common stock
Corporate bonds
Municipal bonds
Mortgages
Credit risk
Interest rate risk
Liquidity risk
Foreign exchange risk
Political risk
Page 55
Call loans
Lender of last resort
Elastic money supply
Federal Open Market Committee (FOMC)
Regulation Q
Margin requirements
Monetary base
Total reserves
Required reserves
Excess reserves
Deferred availability cash items (DACI)
Discount rate
Discount window
Open-market operations
Cash items in process of collection (CIPC)
Page 80
M1
M2
M3
MZM
Divisia money
Excess reserves
Actual reserves
Fed fund rate
Monetary theory
Keynesian theory
Liquidity trap
Humphrey-Hawkins Act
Full employment
Frictional unemployment
Structural unemployment
National rate of unemployment
Price stability
Inflation
Technical factors
Velocity
Page 102
Interest rate
Allocative function
Return on investment
Positive time preference
Real rate of interest
Fisher equation
Nominal interest rate
Page 134
Time value of money
Present value
Future value
Compounding
Discounting
Opportunity cost
Bond
Bond issuer
Bondholder
Par value (principal, face value)
Coupon payment
Coupon rate
Term-to-maturity
Discount bond
Par bond
Premium bond
Zero coupon bond
Credit risk (default risk)
Reinvestment risk
Yield-to-maturity (promised yield)
Realized yield
Expected yield
Bond price volatility
Price-yield profile
Interest rate risk
Duration
Convexity
Page 161
Term-to-maturity
Term structure of interest rates
Yield curve
Forward rate
Implied forward rate
Liquidity premium
Market segmentation
Preferred habitat
Default risk
Default risk premium
Bond ratings
Investment-grade bonds
Speculative-grade (junk) bonds
Municipal securities
Marketability
Call option (call provision)
Put option
Conversion option
Call price
Call interest premium
Put interest discount
Conversion yield discount
Page 199
Money market
Treasury bill
Federal agency
Nonguaranteed agency debt
Federal funds
Immediately available funds
Repurchase agreement
Repo
Reverse repurchase agreement
Commercial paper
Banker’s acceptance
Letter of credit
Page 227
Treasury notes and bonds
Treasury Inflation Protection Securities (TIPS)
Separate Trading of Registered Interest and Principal (STRIP)
Municipal bonds
General obligation bonds
Revenue bonds
Industrial development bonds
Mortgage-backed bonds
Serial bond issue
Primary market
Secondary market
Bearer bonds
Registered bonds
Term bonds
Indenture
Debenture bonds
Senior
Subordinated
Sinking fund
Call provision
Convertible bonds
Competitive sale
Negotiated sale
Private placement
Rule 144A
Thin
Junk bonds
Financial guarantees
Yankee bonds
Samurai bonds
Page 258
Mortgage
Mortgage-backed security (MBS)
Interest rate risk
Fixed-rate mortgage (FRM)
Amortization
Adjustable-rate mortgage (ARM)
Balloon payment mortgage
Reverse annuity mortgage (RAM)
Home equity loan
Home equity line of credit
FHA mortgage
Veterans Administration (VA) mortgage
Private mortgage insurance (PMI)
Government National Mortgage Association (GNMA-Ginnie Mae)
Federal Home Loan Mortgage Corporation (FHLMC-Freddie Mae)
Federal National Mortgage Association (FNMA-Fannie Mae)
Privately Issued Pass-Throughs (PIPs)
Collateralized mortgage obligation (CMO)
Traunches
Real estate mortgage investment conduit (REMIC)
Stripped mortgage-backed securities (SMBS)
Mortgage-backed bonds
Refinance
Call Risk
Prepayment Risk
Extension Risk
Mortgage banker
Predatory lending
Page 292
Equity
Common stock
Preferred stock
Residual claim
Limited liability
Dividends
Proxy
Dual-class firms
Cumulative voting
Straight voting
Nonparticipating preferred stock
Cumulative preferred stock
Adjustable-rate preferred stock
Convertible preferred stock
Convertible bonds
Primary offerings
Initial public offering (IPO)
Seasoned offering
Underwritten offering
Underwriter’s offering
Underwriter’s spread
Private placement
Rights offering
Shelf registration
Market depth
Market breadth
Market resilient
Direct search market
Brokered market
Dealer market
Bid-ask spread
Auction market
Over-the-counter ((OTC) market
NASDAQ
Market order
Limit order
Specialist
American Depositary Receipt (ADR)
Perpetuity
Dividend yield
Capital-gains yield
Diversification
Unsystematic risk
Systematic risk
Page 292
Beta
Aggressive stocks
Defensive stocks
Risk premium
Market risk premium
Security market line (SML)
Price-weighted index
Market value-weighted index
Page 328
Forward contract
Forward price
Spot price
Long position
Settlement date
Counterparty
Spot market
Futures exchange
Marking-to-market
Margin
Open interest
Initial margin
Maintenance margin
Margin call
Hedgers
Speculators
Spread (or straddle)
Traders
Stock-index futures contracts
Basis risk
Cross-hedging
Short squeeze
Option
Strike (or exercise) price
Option premium
American option
European option
Call option
Put option
Covered option
Naked option
Intrinsic value
Page 328
Stock-index options
Swap
Notional principal
Page 363
Currency risk
Country risk
Exchange rate
Euro
Balance of payments
Current account
Capital account
Purchasing power parity
Investment capital flows
Political capital flows
Capital flight
Fixed exchange rates
Bretton Woods
Countertrade
Spot market
Spot rate
Forward market
Forward rate
Letter of credit (LC)
Draft
Sight draft
Time draft
Bill of lading
Banker’s acceptance
Eurodollar
Eurocurrency market
Eurobond market
LIBOR
Eurobond
Seigniorage
Dollarization
Money markets, FX, capital markets, derivatives, commodities, economics, risk
