19.2 stock investments Flashcards Preview

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Flashcards in 19.2 stock investments Deck (51)
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1

What is an hostile takeover?

  • occurs when a company attempts to buy out another company whether they like it or not
  • is when a company goes out of business
  • helps both companies involved
  • is a meeting where IPO's are discussed

occurs when a company attempts to buy out another company whether they like it or not

2

What is the OTC market in the US called?

the NASDAQ

National Association of Security Dealers Automated Quotations

 

3

An index made up of 30 large American companies.  Usually what people are referring to when they ask, 'How did the market do today?'

  • s&p 500
  • the Dow
  • NASDAQ

the Dow

4

a person that buys shares of ownership in a corporation

stockholder

5

represents general ownership in a corporation and a right to share in its profits

common stock

6

What are 3 sources available to learn more about companies before purchasing their stock?

  1. Moody's Handbook of Common Stocks
  2. Value Line
  3. Standard and Poor's Encyclopedia of Stocks

7

Where are stocks of smaller companies traded?

the over-the-counter (OTC) market

NOT the stock exhange

8

broker that provides information about securities you may want to buy, work for brokerage houses with large research staffs

full service broker

9

What is the best known stock exchange?

the New York Stock Exchange

10

interested buyers tell ____ what they would be willing to pay for certain shares of stock

interested buyers tell brokers what they would be willing to pay for certain shares of stock

11

payments paid to stockholders if a business is profitable

dividends

12

The ____ value of a company can change rapidly.

the market value of a company can change rapidly

13

Who must a corporation pay before it can pay any dividends to stockholders?

  • has to pay bondholders first the rate of interest promised to them
  • sometimes there is not enough money left to pay dividends so no dividends are paid
  • if a corporation goes out of business then a stockholder may get very little or nothing back from their investment

14

What are 4 economic conditions that affect stock prices?

  1. inflation
  2. interest rates
  3. consumer spending
  4. employment

15

the relationship between a stock's selling price and its earnings per share

price-earnings (P/E) ratio

16

higher spending for recreation in the economy would most benefit the stock prices for companies in the ____ industry

  • electronics
  • health care
  • office equipment
  • financial services

electronics

17

fee that brokers charge for their services

commission

18

What are the 4 steps in the process for deciding stock purchases?

  1. observe and analyze economic and social trends
  2. determine industries that will be affected
  3. identify companies in those industries
  4. decide whether to buy, sell, or hold the stock of those companies

19

through ____, stockholders state the price at which they are willing to sell their shares of stocks

through brokers, stockholders state the price at which they are willing to sell their shares of stocks

20

What are two disadvantages of investing online?

  1. inexperience in investing can result in large financial loss
  2. many online investors sell or buy stocks too quickly since it can be done in just one click

21

_____ are payments of profits given to shareholders

dividends

22

a licensed specialist in the buying and selling of stocks and bonds

stockbroker

23

How do interest rates effect stock?

as the cost of money changes, company profits increase or decline

24

  • the price at which a share of stock can be bought and sold in the stock market
  • indicates the current value of a share of stock

market value

25

How does consumer spending effect stock?

the profits of companies that sell products and services to households are directly affected by buying habits, so if consumers buy less than profits will be less, if buy more than profits will be greater

26

If a business is doing well, the market value is likely to go ____

up

27

which of the following describes how a stock index works?

  • it is where securities are bought and sold
  • a computer based trading system to enhance the trading of stocks
  • a benchmark average to compare how the economy and market are doing
  • investment tools to 'predict' how the market will perform a year from now

a benchmark average to compare how the economy and market are doing

28

broker that just places orders and offers limited research and other services, charge lower commissions

discount broker

29

What are the 2 types of brokers?

full service broker

discount broker

30

What is the name of the organization that oversees the stock market?

  • Federal Reserve
  • FDIC
  • Securities and Exhange Commission

Securities and Exhange Commission