Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
36 Cards in this Set
- Front
- Back
|
What does a company issue stock?
|
It is a way for them to raise funds for every day business practices.
|
|
|
What is the relationship between risk and rate of return?
|
The higher the risk the higher the return
The lower the risk the lower the return. |
|
|
What are the two basick types of stock?
|
Common and Preferred Stock
|
|
|
What is the definition of a stock?
|
A share of ownership in the assets and earnings of a company.
|
|
|
What are dividends?
|
Profits you receive from a compnay as a shareholder.
|
|
|
Why do people invest?
|
For long term goals and for increasing future wealth.
|
|
|
How do you find rate of return?
|
Profit divided by total investment.
|
|
|
What is inflation?
|
The general rise in prices of goods and services.
|
|
|
What are the 3 types of investors?
|
conservative, moderate, and aggressive.
|
|
|
What is portfolio diversification?
|
Spreading you risk by investing in a variety of stocks, bonds, and other investment tools.
|
|
|
What is portfolio diversification?
|
Reducing your risk by investing in a variety of stocks, bonds, and other investment tools.
|
|
|
What are you called if you own stock in a company?
|
Shareholder
|
|
|
How is preferred stock different from common stock?
|
Preferred stock gets paid dividends and common stock gets voting rights.
|
|
|
The largest and most prestigious exchange is...
|
The New York Stock Exchange (NYSE)
|
|
|
What is the 2nd largest exchange that is not as strict as they NYSE?
|
AMEX American Stock Exchange
|
|
|
This economic law runs the stock market?
|
supply and demand
|
|
|
When reading stock quotes, what does the High/Low represent?
|
the high price and the low price for the day
|
|
|
What is a bull market?
|
When investors are optimistic and the market is doing well.
|
|
|
What is a bear market?
|
When investors are pulling their money out and the market is doing poorly.
|
|
|
What is a stock split?
|
the market price is cut in half and the number of shares you own doubles.
|
|
|
What is a cyclical stock?
|
A stock that follows the ecomony, heavy upon consumer dependency.
|
|
|
What is a countercyclical stock?
|
A company that is not impacted by the economy.
|
|
|
What is a value stock?
|
A stock that is considered a good buy because it is cheaper.
|
|
|
What does the beta measure?
|
How the stock reacts to changes in the market.
|
|
|
What are some examples of a blue chip stock?
|
Wal-Mart, McDonalds,
|
|
|
What is a broker?
|
Someone who you hire to buy and sell stocks and bonds for you. They make money off of commission.
|
|
|
What does NASDAQ stand for?
|
National Association Securities Dealers Automated Quotations
|
|
|
Which type of stock is considered highest risk?
|
speculative stock
|
|
|
What is the Rule of 72 and it's formula?
|
Tells you how long it would take you to double your money. 72/interest rate.
|
|
|
What does the time value of money say about the value of the dollar in the future.
|
the dollar will be worth less because of inflation.
|
|
|
Which savings tools pays higher interest than a savings account, but only allows you to access your money 3 times a month?
|
Money Market Account
|
|
|
What is a certificate of deposit?
|
An account where you have a set interest rate for a set period of time. You have to pay a penalty when withdrawing early.
|
|
|
Why is it important to put money aside in a savings account?
|
For emergencies and for purchases.
|
|
|
How many months worth of pay should be put into the savings account?
|
3-6 months.
|
|
|
What is a mutual fund?
|
A professionally managed portfolio with stocks, bonds, and other investments.
|
|
|
Why is real-estate a good investment?
|
The value statistically always rises and property and land prices move with inflation prices.
|
