Investments Exam

Market Orders: purchase or promote orders which can be to be executed instantly at present market costs; bid price-price a seller is keen to buy a safety; ask price- worth a seller will promote a safety Restrict Orders: an order specifying a worth at which an investor is keen to purchase or promote a safety Cease Order: commerce is to not be executed except inventory hits a worth restrict; Cease- Loss- inventory is to be bought if its worth falls under a sure stage; Cease-Purchase- inventory is to be purchased when its worth rises above sure restrict Algorithmic trading- using a pc program to make fast buying and selling selections Excessive Frequency trading- subset of algorithmic buying and selling that depends on pc applications to make very fast buying and selling selections; technique lies with the corporations to determine revenue alternatives the quickest—?bid ask spreads, cross-market Arab.Darkish pools- digital buying and selling networks the place individuals can anonymously purchase/promote massive blocks of securities (10,000+ shares) Margin- the portion of the acquisition worth contributed by the investor, the rest is borrowed from the broker- restrict on how a lot you may borrow (50% have to be paid in money) Margin Name: requires the investor so as to add new money to the margin account hen the worth Of the securities fall under the mortgage Chapter 4 Funding Firms- monetary intermediaries that make investments the funds of particular person buyers in securities or different property; every investor has a declare to the portfolio the funding firm establishes Internet Asset Worth (NAVA)- worth of every share in portfolio; property minus liabilities expressed on a per share foundation (Market Worth of Belongings-Liabilities)/shares excellent Open-ended fund- fund that points or redeems its shares at NAVA; when buyers wish to money out their shares of a portfolio they promote them again to he fund at NAVA Closed-end fund- shares is probably not redeemed in these funds however traded at costs that may differ from NAVA; when buyers wish to money out shares they need to promote their shares to different buyers.

Pooled portfolios with mounted variety of shares, worth decided by provide and demand.Actual Property Funding Trusts (Reedits)- just like closed finish funds; spend money on actual property or loans secured by actual property Hedge Fund- non-public funding pool, open to rich/institutional buyers, that’s exempt from most SEC rules as a result of they’re structured as riveter partnerships and might pursue different funding choices akin to derivatives, brief gross sales, & leverage Mutual Fund- frequent identify for an open-ended funding firm; cost buyers a load- gross sales fee on mutual fund, which is normally round 6%; efficiency usually doesn’t beat the market if you take charges into consideration Entrance-end load: paid if you buy the shares Again finish load: exit charge if you promote your shares 1 b-1 Prices: annual charges charged by a mutual fund to pay for advertising and marketing and distribution prices; don t take charge up entrance, take % each yearTaxation- paid by buyers in mutual funds not by fund itself Cash Market Funds- spend money on business paper, repurchase agreements, or certificates of deposit; excessive amount low threat, very liquid investments, pay nearly nothing Fairness Funds- make investments primarily in inventory Bond Funds- spend money on long run funds however additional specialization on this sector Balanced Funds- Spend money on each shares and bonds- some are funds Of funds: mutual funds spend money on shares of different mutual funds Index Funds- tries to match the efficiency of a broad market index Alternate-traded Funds- offshoots of mutual funds that permit buyers to learn index portfolios; portfolio can get bigger or smaller as folks purchase and promote; trades on an alternate; shares can change in number- if consumers>sellers, extra shares created.If sellers>consumers, much less shares created Chapter 5 Holding interval return (HP); fee of return over a given funding interval; (finish price-beginning worth+dividend)/starting worth Arithmetic common: the sum of returns in every interval divided by the variety of durations Geometric common: the one per-period return that offers the identical cumulative efficiency because the sequence of precise returns * *higher presentation Greenback weighted common return: the inner fee Of return on an funding Danger: diploma of confidence now we have in what we anticipate will occur to future H Execs Regular Distribution- central to the idea and practices of investments; measures .