01 - Background and Issues

Commitment of current resources in the expectation of deriving greater resources in the future.

Assets used to produce goods and services.

Claims on real assets or the income generated by them.

A financial asset that pays a specified cash flow over a specific period.

An ownership share in a corporation.

Securities providing payoffs that depend on the values of other assets.

Conflicts of interest between managers and shareholders.

Allocation of an investment portfolio across broad asset classes.

Choice of specific securities within each asset class.

Analysis of the value of securities.

Institutions that connect borrowers and lenders by accepting funds from lenders and loaning funds to borrowers.

Firms that invest funds for individual investors.

Firms specialising in the sale of new securities to the public, typically by underwriting the issue.

A term deposit with a bank.

A short-term debt instrument guaranteed by a bank.

Short-term unsecured debt issued by large corporations.

Short-term government securities issued at a discount from face value.

Short-term sales of high grade securities with an agreement to repurchase the securities at a higher price.

Lending rate among banks in the London market.

A fixed, periodic payment from a bond.

Debt obligations of the Australian Government with varying original maturities.

Long-term debt issued by private corporations typically paying semi-annual coupons and returning the face value of the bond at maturity.

The possibility a borrower may not pay a cash flow or flows promised to a bond-holder.

Ownership shares in a publicly held corporation.

Shareholders have voting rights and may receive dividends.

Shares in a corporation, usually paying a fixed stream of dividends.

An instrument with a payoff that depends on the prices of other securities.

The right to buy/sell an asset at a specified price on or before a specified expiration date.

A derivative that can be bought or sold by small investors.