The secondary market involves the resale of previously issued securities between investors. It enables investors who originally bought the investment products to sell them and obtain cash.
Structural unemployment results from changes in the economy, such as technological advances that reduce the need for human labour.
The Montreal Exchange (Bourse de Montreal) is the only exchange in Canada that deals exclusively with financial and equity futures and options.
Net worth is calculated as the value of all of the client’s assets after subtracting outstanding loan and mortgage balances. In this example, the client has $100,000 + $5,000 = $105,000 in assets, and $10,000 in loans. Therefore, his net worth is $105,000 - $10,000 =$95,000.
Risk is the potential volatility in returns or the range of possible future outcomes on the price of a security.
Capital savings are used directly by, for example, a couple investing their savings in a home; a government investing in a new highway or hospital; or a domestic or foreign company paying start-up costs for a plant to produce a new product.
To calculate the rate of inflation over a period of time one must subtract the CPI at the beginning of the period from the CPI at the end of the period and then divide the result by the CPI at the beginning of the period. In this example, the solution can be derived as follows: (146.9 - 140.6) / 140.6 x 100.
Capital moves in and out of a country based on a variety of risk factors. Increased trade barriers or increased taxes on foreign investments would typically reduce the attractiveness of a country for foreign investment. (a), (b) and (d) would all indicate positive trends in a risk factor analysis.
The fund facts document is a four page document designed to give investors key information that is relevant to their investment decision, including facts about the fund itself, performance history, investments and the costs of investing in the fund.
Gary is fulfilling his ethical responsibility by placing his client’s needs ahead of his own need to reach a sales target. As the new fund is similar to the current investment, it would be an appropriate one for the client, so he would not be compromising his legal responsibility to ensure that all client orders are suitable.
The law of supply states that when demand is greater than supply, the price increases, and producers increase production to meet demand and maximize profit.
