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15 Cards in this Set
- Front
- Back
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What is a stock?
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It represents equity or ownership in a company.
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What is a bond?
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It represents a loan to a company.
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How do you calculate Net Worth?
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Assets equals liabilities plus net worth. Or Assets minus liabilities equals networth.
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What is a security?
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An investment that represents either an ownership stake or a debt stake in a company.
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What does FINRA stand for?
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Financial Industry Regulatory Authority
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An individual's stock ownership represents his proportionate interest in a compoany.
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If a company issues 100 shares of stock, each share represents an identical 1/100 or 1% ownership position in the company.
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What are the two types of stock a company can issue?
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Preferred and Common Stock
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What are the characteristics of preferred stock?
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Normally pays a fixed, semiannual dividend and has priority claims over common stock.
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What are the four ways Common Stock can be classified?
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Can be classified as authorized, issued, outstanding, and treasury.
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What is authorized stock?
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Refers to a specific number of shares the company has authorization to issue or sell
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What is Issued Stock?
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Issued Stock has been authorized and distributed to investors.
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What is Outstanding Stock?
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Outstanding Stock includes any shares that a company has issued but has not repurchased.
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What is Treasure Stock?
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Treasury Stock is stock a corporation has issued and subsequently repurchased from the public.
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ABC Company has authorized 1 million shares of common stock. It issued 800,000 shares one year ago. It then repurchased 200,000 shares for its treasury. How many shares of ABC stock are outstanding?
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Issued Stock minus Treasury Stock equals Outstanding Stock. Therefore, 800,000 minus 200,000 equals 600,000.
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For investor's is Par Value a relavent value?
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No. It is an arbitrary value the company gives the stock in the company's articles of incorporation and has no effect on the stock's market price.
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