Unit 6: The Convergence of Organized Exchanges and Over-the-Counter Markets

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Across
  1. 3. A wealthy private investor who provides funds directly to a start-up company.
  2. 5. An offering where both individual and institutional investors have the opportunity to purchase securities, usually made available by an investment-banking firm.
  3. 10. Tangible entities that physically occupy space (such as a building), where financial instruments are traded on their premises. The New York Stock Exchange (NYSE) is an example.
  4. 14. Markets in which a buyer can agree to purchase something at a future date by signing a contract that states what is being bought, the quantity, the price, and the date of purchase.
  5. 15. The first time a company issues stock to the public.
  6. 16. A market in which new, as opposed to previously issued, securities are traded. The issuing firm receives money from investors in a primary market transaction.
Down
  1. 1. An institution, such as a life insurance company, mutual fund, or pension fund, that collects the savings of individuals and issues its own (indirect) securities in exchange, then uses these funds to acquire the business firm’s (direct) securities.
  2. 2. A firm that raises money from institutional investors and high-net-worth individuals, then pools the funds to invest in risky start-ups and early-stage companies with high-return potential.
  3. 4. The sale of additional shares by a company whose shares are already publicly traded. Also called a secondary share offering.
  4. 6. The process where securities are offered and sold directly to a limited number of investors, often on a face-to-face basis.
  5. 7. The market where currently outstanding securities are traded among investors. The issuing firm does not receive any money from transactions in this market.
  6. 8. All security markets except the organized exchanges. The money market is an over-the-counter market.
  7. 9. The market for transactions in short-term debt instruments, with maturity periods of one year or less. It is primarily a telephone and computer market, not a physical location.
  8. 11. The market for long-term financial instruments, meaning those with maturity periods that extend beyond one year. This includes term loans, financial leases, and corporate stocks and bonds.
  9. 12. The relationship among the nominal interest rate, the real rate of interest, and the rate of inflation. The nominal rate is equal to the sum of the real rate, the inflation rate, and the product of the real rate and the inflation rate.
  10. 13. One one-hundredth of 1 percent.