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41 Cards in this Set

  • Front
  • Back
Common Stock
Form of equity representing ownership
Liabilities - IOUs of the issuer
Preferred Securities
Securities issued as stock but with fixed dividend rates
Convertible Securities
Fixed-income obligation (Bond or preferred stock)than be converted into common stock
Mutual Fund
Organization that invests in and professionally manages a diversified portfolio of securities
Different Ways to Invest
Common Stock, Bonds, Preferred and Convertibles, Mutual Funds, Real Estate,
Commodities, Financial Futures, Options
Contracts to buy and sell raw goods and materials
Financial Futures
Similar to commodities except the apply to certain types of financial instuments
Derivative Securities
Securities such as futures and options, whose value is derived from the price behavior of an underlying real or financial asset
A document made available to prospective clients that describes the firm and a new security issue
Capital Market
Long term securities
Money Market
Short term securities
Primary Market
Selling new issue to the public
Secondary Market
Investors executing transactions among themselves
A security that has met the prerequisites for, and thus is traded on, one of the organized securities exchanges
OTC (Over the Counter) Market
intangible relationship between buyers and sellers
Unlisted Securities
account for 40% of total dollar volume of domestic shares traded
National Association of Securities Dealers Automated Quotation System
Bid Price
the price at which one can sell a security
Ask Price
the price at which one can purchase a security
Securities Act 1933
SEC (Securities and Exchange Commission)
Bull Market
Optimism (rising prices)
Bear Market
Pessimism (falling prices)
full-service broker
transactions + full array of services (Merril Lynch)
Discount Broker
low cost, little to no service for investors
Online (electronic) Broker
Transactions over the internet
Securities Investor Protection Corporation (SIPC)
Non profit subject to SEC and congressional oversight to protect investors against company failure
odd lot
fewer than 100 shares of stock
round lot
100 or multiple
Brokers don't..
manage portfolios
Market Order
Order to buy or sell security at best price available at time of placement
Limit Order
buy or sell above or below certain prices
Sell below certain level
Margin Purchase
Purchase of securities with borrowed funds, the allowable amount of which is limited by the Fed (50%)
Short Sale
Transaction involving selling borrowed securities with the exception that they can be replaced at a lower price at some future date, anticipating decline
Informed investors
know what they're getting into, use annual stockholder's report, brokerage reports, and advisory services
Stock split
mitosis of shares without losing net value of holding
Standard and Poor's (S&P)
similar to DJIA, but different computation method
Dow Jones Industrial Average
Most widely followed measure of stock performance, 30 blue chips, mostly on NYSE
New York Stock Exchange
index of the performance of all NYSE listed stocks
American Stock Exchange (AMEX)
index of performance of all stocks listed on the American Stock Exchange