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51 Cards in this Set
- Front
- Back
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stocks are also called (2)
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equities or securities
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what is the stock market based on
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the economic theory of supply and demand
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when you own shares of a stock of a company your are called a (2)
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shareholder or investor
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how many votes does one share of stock hold
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one
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why do corporations issue shares of stock
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to attract money
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what are the two kinds of stock
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common and preferred stock
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can any company issue stock, why
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no b/c it has to be a corporation
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what kind of stock do most corporations issue to investors
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common stock
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the profits you make from a stock are called
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capital gains
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how do you make money in stocks usually
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buy shares at a price and then sell it later at a higher price
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where in the street in new york did buyers and sellers originally meet
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68 wall street
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what is a stock exchange
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it provides an organized marketplace for stocks
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name the three original major stock exchanges
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NYSE (new york stock exchange)
AMEX (american stock exchange) NASDAQ (national association of securities dealers automated quotation system) |
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what was the first electronic stock exchange
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NASDAQ
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what is the countries oldest organized stock exchange
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philadelphia stock exchange
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which stock exchange has the biggest and most well-known companies
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NYSE
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which stock exchange has the most technology corporations
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NASDAQ
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what does the OTC stand for
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over the counter stocks
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where are OTCs traded
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NASDAQ
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about how many stocks are traded on all three stock exchanges
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over 5000
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about how many are traded on OTC
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over 5000 smaller companies
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name three types of players that participate in the market
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investors, short term traders, and professionals
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what is an investor
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a person who buys shares of a company and holds on to the long term hoping for a profit
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what is a short term trader
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holds stock for a short amount of time hoping for a profit, usually just worried about the price not going up and doesn't care about the business of the corporation
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what is a day trader
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a more volatile form of short term trading where positions are rarely held for more than a day
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what is a professional trader
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a trader who invests other people's money and takes a cut
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how much is a seat on the NYSE
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couple of million dollars
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what is the most popular method of determining if a market is up or down for the day
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DJIA
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what does the DJIA stand for
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dow jones industrial average
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how is the DJIA calculated
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add up the prices of the stock in the index and divide it by the number of stocks (but different companies have different weights depending on their importance and size)
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what does the DJIA give us clues to
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how the market is currently trending
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how many stocks did DJIA start with
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12
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how many stocks are in the DJIA today
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30
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describe the 30 stocks
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they are a cross section of the most important sectors of the economy
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what is a sector
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a group of companies in the same industry (technology, energy, etc.,)
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if the Dow is down for the day is your stock down
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no because it just could be a very large corporation which has a huge amount of weight in the average that's weighing it down
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what is the second most popular index
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nasdaq composite index
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which companies does the nasdaq composite index track
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more than 5000 companies listed on the nasdaq
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what is the third most popular index
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S&P 500
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what does the S&P 500 stand for
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standard and poor's corporation
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which stocks does the S&P 500 represent
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500 companies which they pick which are large stocks and mostly technology stocks
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what is your goal of a professional money manager
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to beat the major indexes
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in what way do you need to beat the indexes
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earn a higher ROI than them
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if your stock went from $10 to $20, many points did you gain
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10
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what is the job of the specialist
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an intermediary that makes a market for every stock listed on the exchange (gives you a selling price and buying price) and takes commission
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what are market makers
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a computerized intermediary system which makes a market for your stock on nasdaq
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if a stock is very popular vs not very popular, how does this affect the market makers
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more market makers are assigned to the more popular vs the less popular
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why are stocks a good investment
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b/c they outperform any other long term investment
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what was the average ROI for stocks in the past 75 years
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11%
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are stocks riskier short term investment
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yes
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what is the risk of investing your money in a savings account
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inflation can make your money worth less
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