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CFMP > Equities: Investing and Trading > Flashcards

Equities: Investing and Trading Flashcards

(64 cards)

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1
Q

“The difference between a company’s current assets and current liabilities”?

A

Working capital

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2
Q

“The ownership interest that shareholders hold in a company’s assets and earnings”?

A

Equity

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3
Q

What are the conditions or restrictions that a company must adhere to when issuing debt securities known as?

A

Debt covenants/conditions

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4
Q

“The general trend of the Philippine Stock Exchange”?

A

PSEI (Philippine Stock Exchange Index)

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5
Q

“A type of stock offering where existing shareholders are given the option to purchase new shares at a lower price than the market price”?

A

Stock Rights Offering (SRO)

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6
Q

“The total value of a company’s outstanding shares of stock, calculated by multiplying the stock’s current market price by the total number of outstanding shares”?

A

Market Capitalization

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7
Q

“A date when a company announces its intention to pay dividends to shareholders”?

A

Dividend Declaration Date

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8
Q

What type of stock offers voting rights to shareholders and is last in line to claim assets and dividends in case of liquidation?

A

Common Stocks

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8
Q

What type of order in stock trading specifies the maximum or minimum price at which you are willing to buy or sell shares?

A

Limit Order

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9
Q

Identify the term for “Income from a stock, given once a year.”

A

Cash Dividend

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9
Q

“A professional who facilitates stock trading transactions on behalf of investors”?

A

Stock Broker

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10
Q

“The date when a company verifies who are entitled to receive dividends”?

A

Record Date

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10
Q

“The maximum and minimum price of the stock for the day”?

A

Trading Threshold

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11
Q

“A competitive business plan for a company”?

A

Sensible business plan

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11
Q

“A protective measure to avoid price manipulation in stock trading”?

A

Trading Threshold

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11
Q

“Frequent buying and selling in stock trading”?

A

Scalp Trading

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12
Q

“A rise in the price of a stock, offering potential return.”

A

Capital Appreciation

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12
Q

“An organized market for tradable stocks where brokers buy and sell stocks”?

A

The Stock Exchange

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13
Q

“Shares of the company’s subsidiary as dividends”?

A

Property Dividends

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14
Q

“Determining the amount on your account that you are willing to risk in trading.”

A

Position Sizing

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15
Q

Enumerate the three primary reasons why companies need funds.

A
  1. Capital expenditures
  2. working capital
  3. paying off/refinancing existing debt
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16
Q

Enumerate the key components of a company’s balance sheet equation

A

Assets = Liabilities + Equity.

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16
Q

List the types of interest rates that can be associated with debt securities

A

Fixed, variable, or both

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17
Q

Name the two locations of the Philippine Stock Exchange (PSE).

A

Makati and Ortigas

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18
List the key features of the Philippine Stock Exchange (PSE).
One price policy for both floors, double-auction market, fully automated.
19
List the six sector indices of the Philippine Stock Exchange (PSE)
Financial Industrial Holding Firms Property Services Mining & Oil
19
What steps must a person who wants to buy stocks go through? Enumerate them.
Pass through a broker and have a statement of account.
20
Enumerate the qualifications for a company to be included in the PSEI.
Public float, liquidity, and market capitalization
21
Enumerate the four types of stock classification based on their claim on revenues
Common Stocks Preferred Stocks Warrants
22
List the three types of dividends
Cash Dividend Stock Dividend Property Dividend
22
income from a stock
Cash Dividend
23
additional shares issued
Stock Dividend
24
dividends in kind
Property Dividend
25
Enumerate the key dates involved in the payment of dividends
Dividend Declaration Date Ex-Dividend Date Record Date Payment Date
26
Enumerate the two main segments of the stock market.
Primary Market Secondary Market
27
List the the types of stock trading orders
Market Order Limit Order Day Order Good 'Till Cancelled (GTC) Stop Loss Order
28
Enumerate the four trading styles in the stock market.
Position Traders Swing Traders Day Traders Scalp Traders.
29
Name the three criteria for company analysis
Sensible business plan Solid Management Financial Analysis
30
Enumerate the steps in determining position sizing in trading
Determine the amount willing to risk Consider diversification
31
List the types of stock offerings, including their abbreviations
IPO (Initial Public Offering) 2PO (Secondary Public Offering) SRO (Stock Rights Offering)
32
Enumerate the components of the settlement date (T+2) process in stock trading
Transaction Date + 2 days (Settlement Date) Sellers receive funds after 2 days
32
What are the three primary reasons why companies need funds?
Financial capital expenditures working capital paying off/refinancing existing debt
32
Enumerate the factors that stock traders should consider in a trading plan
Goals Risk tolerance Realistic expectations
33
epresents the general trend of the Philippine Stock Exchange and is composed of the 30 most active companies in the market.
PSEI
34
Companies need funds for financial capital expenditures, working capital, and maintaining a certain level of equity
True
35
In the equation "Assets = Liabilities + Equity," assets represent what a company owes to others.
False
36
Debt securities issued by companies can have either fixed or variable interest rates, but not both
False
37
The Philippine Stock Exchange (PSE) operates with a one-price policy for both its branches in Makati and Ortigas.
True
38
The PSEI represents the 30 most active companies in the Philippine Stock Exchange, and its composition remains constant.
False
39
High inflation tends to increase purchasing power, making it a favorable time to invest in stocks
False
40
Preferred stocks grant shareholders voting rights and are the first to claim assets and dividends in case of liquidation.
False
40
True or False: Stock traders should have an aggressive profile to succeed in the market.
True
40
The Stock Rights Offering (SPO) is typically offered to the public before existing shareholders.
False
41
Scalp trading involves frequent buying and selling of stocks within a single trading day.
True
41
Day traders aim to hold positions for the medium to long term.
False
42
In an IPO (Initial Public Offering), shares of a company are first offered to the existing shareholders before the public.
False
43
Dividend Declaration Date is the date when dividends are credited to shareholders' accounts.
False
44
Sensible business plan, solid management, and financial analysis are key components of company analysis.
True
44
Record Date is the date when a company announces its intention to pay dividends.
False
44
Good 'Till Cancelled (GTC) orders remain open in succeeding trading days until they are executed or cancelled
True
45
Stop Loss Order is used to limit an investor's losses on a position
True
46
Diversification involves concentrating all investments in a single asset to maximize returns
False
47
Property dividends can include shares of the company's subsidiary or physical assets
True
48
Position sizing involves determining the amount you are willing to risk in trading.
True

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