FNBU 3221 Study Guide - Spring 2018, Comprehensive Midterm Notes - Weighted Average Cost Of Capital, Weighted Arithmetic Mean, U.S. Securities And Exchange Commission

• School: Fordham University
• Department: Finance
• Course: FNBU 3221
• Professor: Joe McBride-Meara

Document Summary

Credit supplier (take in savings from net savers and give out loans/instruments to net creditors) Liquidity source ("make the market" - facilitate the buying/selling that creates a market for financial instruments) Direct transfer: an exchange straight between a lender and borrower. Indirect transfer: an exchange through a financial intermediary. Semidirect transfer: an exchange mediated by an investment banker: intermediary chooses how to handle the lender"s funds to dole them out to borrowers, financial intermediaries make money through the net interest margin. Money should always be earning the holder something (even tiny bits of interest!) Money markets: markets for debt securities of one-year maturity or less: used for liquidity management. Capital markets: markets for debt and equity securities with maturity greater than one year: used for intermediate and long-term financing. The market for the first time that an instrument is sold: example: ipo in which the company initially distributes shares.