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36 Cards in this Set
- Front
- Back
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Security |
An investment of money, in a common enterprise, with the expectation of profits to be derived primarily from the efforts of a person other than the investor. A security may represent either ownership interest in a company or creditor relationship through a debt obligation with the company. |
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Equity |
Ownership. Most commonly represented by various forms of stock. Also instruments that give in Hanst access to securities such as rights, warrants, and options, also considered equity securities. |
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Debt |
Most commonly represented by bonds and notes. Lending or borrowing. |
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Assets |
What the company owns: Cash in the bank, Accounts Receivable, Investments, property, inventory, Etc |
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Liabilities |
What the company owes: accounts payable, short-term and long-term debt and other obligations; |
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Net worth |
The excess of the value of assets over the value of liabilities.
Assets - liabilities = net worth |
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Self-regulatory organization SRO |
The Maloney act of 1938 gave the SEC authority to establish other self regulatory organizations, the first of which was the national Association of securities dealers NASD. This was a membership like that of the exchanges, In comprised the broker/dealer firms that engage in the securities business and whose function was to regulate the securities industry within the sign jurisdictions. |
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Broker |
1. An individual or a firm that charges a fee or commission for executing buy and sell orders submitted by another individual or firm.
2. The role of a brokerage firm when it acts as an agent for a customer in charge is the customer a commission for services.
3. Any person engaged in the business of affecting your transactions insecurities for the accounts of others that is not a bank. |
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Dealer |
1. The role of a brokerage firm when it acts as a principal in a particular trade. A firm acts as a dealer when it buys or sells the security for its own account in at its own risk then charges the customer a mark up or markdown.
2. Any person engaged in the business of buying and selling securities for their own account, either directly or through a broker, that is not a bank. |
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Associated person to remember |
Any employee, manager, director, officer, or partner of a member broker/dealer or another entity is sure, bank, ET see. Or any person controlling, controlled by, or income and control with that member. |
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Customer |
Any individual, person, partnership, corporation, or legal entity that is not a broker, dealer, or municipal securities dealer-that is, the public. |
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Primary offering |
The initial sale of the security; all further trades are in the secondary market |
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Secondary transaction |
All trades made after primary offering |
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FINRA |
Financial industry regulatory authority is a registered securities association in is the successor to the NASD; it is the SRO that regulates participants in the over-the-counter market insecurities as well as members of the New York Stock Exchange. |
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Market price or current market value |
The price investors most paid to buy the stock. Market value is influenced by a company's business prospects in the consequent the fact of supply and demand of the number of shares members want to buy relative to how many are available |
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Stocks book value per share |
Is a measure of how much a common stockholder could expect to receive for each share if the corporation where to liquidate. This only reflects the corporations tangible assets and liabilities divided by the number of shares outstanding. The stock market value is usually substantially different |
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Stocks par value |
For investors in common stock common stock it is meaningless. It doesn't affect the stock market price it is an arbitrary value to company gives the stock units articles of incorporation |
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Common stock voting rights. Statutory voting |
Allows a stockholder to cast one vote per share owned for each item on a balance, such as seats on the Board of Directors. The board candidate needs a simple majority to be elected. |
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Common stock voting rights. Cumulative voting |
Allow stockholders to allocate their votes in any manner they choose. Cumulative voting may be advantageous for small shareholders by giving them a greater opportunity to offset the bolts of large share of shareholders I combining all the shares on a single seat |
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Common stockholder preemptive rights |
The right for a stockholder to buy enough newly issued shares to maintain their proportionate ownership of a corporation |
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How did stockholders limited liability |
Protect stockholders from having to pay or corporations debts in bankruptcy |
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Carmen stockholder rights inspection of corporate books |
Stockholders have the right to receive annual financial statements and obtain list of stockholders. Inspection rights to nine clue the right to examine detailed financial records or the minutes of director meetings. |
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Common stockholders rights residual claims to assets |
If a corporation is liquidated the common stockholder as owner has a residual right to claim corporate assets after all debts and holders of more senior security seven satisfied. The carbon stockholder is at the bottom of the liquidation priority list. This makes common stock the most junior security |
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Forest of common stock ownership |
Market risk. It is the tendency of the price of the stock to move with the market up or down.
Business risk. The level of risk of the specific business. Example searching for oil is riskier than operating a grocery store.
Decreased or no income risk. Dividends are not guaranteed
Low priority at this dissolution. Common stockholders have only residual rights to corporate assets upon dissolution |
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Preferred stock categories.
Straight preferred stock |
No special futures be on the stated dividend payment. Miss dividends are not paid to the holder. The year stated dividend must be paid on straight preferred if any dividend is to be paid to common stockholders |
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Cumulative preferred stock |
With cumulative preferred any dividends in arrears must be paid prior to paying continent dividends |
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Convertible preferred stock |
Convertible preferred stock |
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Divet in yield or current yield |
Annual dividend divided by current market value of the stock equals dividend yield or current yield |
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Divet in yield or current yield |
Annual dividend divided by current market value of the stock equals dividend yield or current yield |
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Order of dividend payment |
One. Dividends in arrears pay to cumulative shares. Two. Stated dividends paid to all preferred shares. Three. Common dividend |
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Total return |
A combination of the dividend income or interest paid in the price appreciation or decline over a given period of time |
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Stock certificates |
Identify the company's name and number of shares in investors name among other things. Each certificate is printed with the securities CUSIP number and identification or tracking number |
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Negotiability of stocks |
A stockholder can give, transfer, sign, or sell shares the stockholder owns with you or no restrictions. |
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AmericInn depository receipts ADR |
Still taste the trading the foreign stocks in the US. In ADR, typically issued by a bank that has bought the Ford stock, is negotiable security that represents a receipt for shares of stock in a non-US corporation. ADRs are bought and sold in the US securities market like stuck |
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Rights of ADR owners |
Edie are holder has no preemptive rights and generally no boating rights but does have the right to exchange ADRs for the actual for insurance certificates |
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ADR risks |
They are subject to market risk and uniquely subject to Currensy risk because foreign companies pay dividends in their own currency |
