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
What is the OTC market in the US called?
National Association of Security Dealers Automated Quotations
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
a person that buys shares of ownership in a corporation
represents general ownership in a corporation and a right to share in its profits
What are 3 sources available to learn more about companies before purchasing their stock?
- Moody's Handbook of Common Stocks
- Value Line
- Standard and Poor's Encyclopedia of Stocks
Where are stocks of smaller companies traded?
the over-the-counter (OTC) market
NOT the stock exhange
broker that provides information about securities you may want to buy, work for brokerage houses with large research staffs
full service broker
What is the best known stock exchange?
the New York Stock Exchange
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
payments paid to stockholders if a business is profitable
The ____ value of a company can change rapidly.
the market value of a company can change rapidly
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
What are 4 economic conditions that affect stock prices?
- interest rates
- consumer spending
the relationship between a stock's selling price and its earnings per share
price-earnings (P/E) ratio
higher spending for recreation in the economy would most benefit the stock prices for companies in the ____ industry
- health care
- office equipment
- financial services
fee that brokers charge for their services
What are the 4 steps in the process for deciding stock purchases?
- observe and analyze economic and social trends
- determine industries that will be affected
- identify companies in those industries
- decide whether to buy, sell, or hold the stock of those companies
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
What are two disadvantages of investing online?
- inexperience in investing can result in large financial loss
- many online investors sell or buy stocks too quickly since it can be done in just one click
_____ are payments of profits given to shareholders
a licensed specialist in the buying and selling of stocks and bonds
How do interest rates effect stock?
as the cost of money changes, company profits increase or decline
- 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
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
If a business is doing well, the market value is likely to go ____
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
broker that just places orders and offers limited research and other services, charge lower commissions
What are the 2 types of brokers?
full service broker
What is the name of the organization that oversees the stock market?
- Federal Reserve
- Securities and Exhange Commission
Securities and Exhange Commission