Chapter 7, Markets Flashcards
(14 cards)
What is a stock exchange?
A place where financial instruments are bought and sold, sellers matched with buyers and agree transactions
What do company’s do to be able to trade and exchange?
Become listed
Whta do companies generally have to do to become listed?
- Be well established
- Be large enough to atttract sufficent trading
Why may companies become listed?
- Raising money by selling shares
- Increasing the public profile and awareness
Why may companies undertake IPOs?
It is easier to buy or sell their shares after the IPO because the shares are then traded on the stock exchange - shares are more liquid
What are closing prices?
A formal report of prices at which the shares are trading at the end of the day
Why are closing prices used?
Shows whether a share price has performed well or not day to day
What is a well known stock exchange index?
Dow Jones Industrial Average
What happened when the stock index increases?
Prices in general increase
What are single market indices?
Shares listed on just one stock exchange
What is a stock market index?
A number that combines a group of share processes weighted by the size of the firm - so price movements of larger firms have a bigger effect on the overall index
How many companies are in the FTSE 100/
100
How many companies are in the S&P 500?
500
How many companies are in the DJIA?
30
