Fin 410 Exam 1 (Chap 1-2)

Front 1

Cash reserves

Back 1

Short-term money market instruments

Front 2

Treasury bills

Back 2

Treasury obligations with maturities of one year or less

Front 3

Bonds

Back 3

Interest-bearing debt obligations

Front 4

Treasury notes

Back 4

Treasury obligations with maturities of more than 1 year but less than 10 years

Front 5

Common stock

Back 5

A proportionate ownership stake in a corporation

Front 6

Defined-benefit retirement plan

Back 6

Employer-funded retirement program. Employer will pay certain amount to employee depending on salary history and time employed

Front 7

Defined-contribution retirement plan

Back 7

Employee-funded retirement program in which employees direct and contribute to their own retirement plans. Retirement income depends on employee contribution

Front 8

Portfolio

Back 8

Diversified collection of stocks, bonds and other assets

Front 9

Risk

Back 9

Chance of a loss of wealth or a failure to meet investment goal

Front 10

Expected return

Back 10

Future return anticipated after analyzing the financial asset.

Front 11

efficient-market hypothesis

Back 11

Idea that every security is correctly priced, not overvalued or undervalued

Front 12

Return on equity

Back 12

Accounting net income divided by stockholders' equity or book value per share

Front 13

Regression to the mean

Back 13

Tendency of profit rates to return toward long-term industry and economy wide averages

Front 14

Price-earnings (P/E) Ratio

Back 14

Stock price divided by earnings per share

Front 15

Incentives

Back 15

Financial reasons for inciting an action

Front 16

Investor psychology

Back 16

The reasons, emotions, and perceptions of the human brain as they pertain to investments

Front 17

Stock Quotes

Back 17

Offers to buy and sell shares at specific prices

Front 18

Real time

Back 18

Up-to-the-minute, current stock quote

Front 19

EDGAR

Back 19

Electronic Retrieval Analysis System for SEC filings

Front 20

Ticker symbol

Back 20

Unique one, two, three or four letter code for a company

Front 21

10Q report

Back 21

Quarterly accounting information filed with the SEC

Front 22

Proxy Statement

Back 22

Annual meeting announcement and shareholder voting information

Front 23

13D

Back 23

Filings made to the SEC within 10 days of an entity's attaining a 5 percent or more position in any class of a company's securities

Front 24

Form 144

Back 24

Filings submitted to the SEC by holders of restricted stock who intend to sell shares

Front 25

Stockbroker

Back 25

Financial agent who assists investors with buying and selling financial assets

Front 26

Churning

Back 26

Illegal broker-initiated trading in client accounts to generate commission income

Front 27

Security analyst

Back 27

Finance professional who analyzes and makes recommendations regarding stocks and other financial assets.

Front 28

Portfolio manager

Back 28

Finance professional in charge of making buy, sell, and hold decisions for a portfolio

Front 29

Certified Financial Planner (CFP)

Back 29

Finance professional who helps individuals identity and meet financial needs.

Front 30

Investment banker

Back 30

Finance professional who helps companies and government organizations acquire capital through the issuance of financial assets.

Front 31

New York Stock Exchange (NYSE)

Back 31

Largest stock market in terms of market capitalization

Front 32

Agency auction market

Back 32

Market in which brokers represent buyers and sellers and prices are determined by supply and demand

Front 33

Specialist

Back 33

Employee of NYSE firm who manages the market for an individual stock

Front 34

Round lot

Back 34

100 shares

Front 35

American Stock Exchange (Amex)

Back 35

Nation's second-largest stock exchange

Front 36

Public float

Back 36

Common stock held by unaffiliated institutional and individual investors

Front 37

Nasdaq Stock Market

Back 37

Largest organized equities market by trading volume and number of listed companies

Front 38

Negotiated market

Back 38

Price determination through bargaining

Front 39

Market makers

Back 39

Member firms that use their own capital to trade and hold an inventory of NASD stock

Front 40

Customer order flow

Back 40

Customer buy and sell activity

Front 41

Market maker spread

Back 41

Difference between bid and ask prices

Front 42

Inside market

Back 42

Highest bid and lowest offer prices

Front 43

Nasdaq SmallCap Market

Back 43

Market for smaller companies that trade prior to full listing on the Nasdaq national market

Front 44

Penny stocks

Back 44

Equities priced below $1

Front 45

OTC Bulletin Board (OTCBB)

Back 45

Regulated quotation service for very small over-the-counter equities securities

Front 46

American Depositary Receipts (ADR)

Back 46

Coupons that signify ownership of foreign stock

Front 47

Dow Jones Industrial Averages (DJIA)

Back 47

Price-weighted index of 30 large, industry-leading stocks

Front 48

DJIA divisor

Back 48

Adjustment factor used to account for stock splits

Front 49

S&P 500 index

Back 49

Popular value-weighted market index

Front 50

Equity benchmark

Back 50

Performance standard to be evaluated against

Front 51

Russell 3000 index

Back 51

Market capitalization index for the 3000 largest U.S. companies (98 percent of U.S. market cap)

Front 52

Russell 1000 index

Back 52

Market capitalization index for the 1000 largest U.S. companies (90 percent of U.S. market cap)

Front 53

Dow Jones Wilshire 5000 Composite Index

Back 53

Total dollar value of the U.S. equity market (in billions of dollars)

Front 54

Nasdaq Composite Index

Back 54

Market value-weighted index of all 5000+ stock listed on the Nasdaq Stock Market

Front 55

Nasdaq 100 Index

Back 55

Market-capitalization-weighted index of Nasdaq's largest companies

Front 56

S&P MidCap 400 Index

Back 56

Market cap index for 400 medium-sized domestic stocks

Front 57

Dow Jones Wilshire 4500 Completion Index

Back 57

Mid-cap index of Dow Jones Wilshire (5000) Index companies minus the S&P 500

Front 58

Russell 2000 index

Back 58

Small-company stock price index for the 2000 smallest companies in the Russell 3000 index

Front 59

Nikkei 225 Index

Back 59

Leading measure of the Japanese stock market

Front 60

FTSE-100

Back 60

Capitalization-weighted index of the 100 top companies on the London Stock Exchange

Front 61

TSE-35

Back 61

Market basket of 35 blue-chip Canadian companies

Front 62

Hang Seng Index

Back 62

Market-cap-weighted measure of Hong Kong stocks

Front 63

Europe, Australasia, Far east (EAFE) index

Back 63

Leading global stock index of stocks from 21 countries

Front 64

Emerging market

Back 64

Stock markets in developing nations

Front 65

Developed market

Back 65

Stock markets in mature countries.

Front 66

Sarbanes-Oxley Act

Back 66

Law instituting public accounting reforms and investor protections

Front 67

Self-regulatory organizations (SROs)

Back 67

Industry group with oversight authority granted by the SEC

Front 68

National Association of Securities Dealers (NASD), Inc.

Back 68

A self-regulatory organization of the securities industry

Front 69

Stock Watch

Back 69

Computerized system that flags unusual volume or price changes

Front 70

Intermarket Surveillance Group

Back 70

Coordinated effort to detect cross-market manipulative trading

Front 71

Securities arbitration

Back 71

Private form of dispute resolution with binding outcomes

Front 72

Circuit breakers

Back 72

Rules for halting securities trading in volatile markets.

Front 73

Investment clubs

Back 73

A group formed to learn and invest. Members contribute money and investment idea.