FINA 200 Lecture Notes - Lecture 8: Money Market, Systematic Risk, Risk Premium
14 Apr 2018
School
Department
Course
Professor
Document Summary
Money market securities: short term assets with maturity of one year or less: provide interest income, low level of risk, saving alternatives: gic, canada saving bonds. Common stock: a certificate issues by a firm to raise funds that represents partial ownership in the firm. Common stock investor: they have the right to vote on key issues, they can elect the board of directors, they make their profits from stock markets going up rather than dividend. Preferred stock: certificate issues by firm that entitles shareholders to receive first priority when it comes to dividends. A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves). Preferred stock investors: they seek income from dividends, prefered stock does not have potential to increase over time like common stock. Therefore, common stock is issued more frequently then preferred stock. Shares are traded between primary and secondary markets:
