EFB201 Fixed Income and Equity Markets Lecture Notes

These flashcards cover key terminology and definitions related to the fixed income and equity markets based on the lecture notes.

Money Market

An over-the-counter market for short-term borrowing and lending.

Cash Rate

The interest rate paid by borrowing commercial banks to lending commercial banks for unsecured overnight loans.

Repurchase Agreement (Repo)

A transaction where a borrower sells securities with an agreement to repurchase them at a higher price after a short period.

Ideal Money Market Instrument

Characterized by low default risk, low price risk, high marketability, and large denominations.

Preferred Stockholders

Holders of shares that have priority over common stockholders in claims on assets.

Libor (London Interbank Offered Rate)

The average interest rate at which major global banks lend to one another in the international interbank market.

Common Equity

Represents ownership in a company and does not obligate the company to make periodic dividend payments.

Risky Capital Market Security

Preferred stock is riskier than corporate bonds but less risky than common stock.

Coupon Payments

Periodic interest payments made to bondholders, which may not apply to all bonds.