fiance ch 1

Question 1

where are the shares of public corporations traded

Answer 1

on a exchange

Question 2

who are public corporations regulated by

Answer 2

the government

Question 3

what does not offer low fees and have high risk

Answer 3

hedge funds

Question 4

what should shareholders look for in a board of directors

Answer 4

they should be independent

Question 5

what is the time a employee has to wait before they can use there stock option called

Answer 5

the vesting period

Question 6

what is the difference from a primary market and a secondary one

Answer 6

in primary markets the company is issuing and selling the shares

Question 7

who issues and sells the shares in a secondary market

Answer 7

mostly other investors either instituions or individuales

Question 8

what are the two types of coporations that are subject to double taxation in canada

Answer 8

public and private corporations

Question 9

do partnerships have shareholders

Answer 9

no the partners are the only people who hold shares in the business

Question 10

what are insurance companies like manulif and sunlife

Answer 10

financial intermediaries

Question 11

why would a cleint want a lawyer to work on contingency

Answer 11

if they are not sure they will win the case or they dont have the money up front. (basically use it if its high risk)

Question 12

what is contingency

Answer 12

when the lawyer would be paid a portion of the earrnings of the case rather then a upfront cost

Question 13

what is the definition of a corporation

Answer 13

a seprate legal entity from the owners

Question 14

what is a poison pill in a corporation

Answer 14

its a shareholder takeover defence (like if x number of shares are bought be one person automatically they buy shares)

Question 15

what are stock grants

Answer 15

its a incentive device given to managment and employees to encourage them to work harder since if they do the value of the shares they have will go up

Question 16

what happens to the employees stock grants if they leave before the end of the vested period

Answer 16

they loose it all so this does keep decrease employee turnover but also increases number of people doing the bare minimum

Question 17

what is profit sharing

Answer 17

when the employees recive a cutback based on the companies for their preformance

Question 18

what is the exersize period on a employees stock option

Answer 18

the time frame that you can buy the stock at that price

Question 19

what is the vesting period

Answer 19

the time you have to wait before selling the stock

Question 20

what is ment by option

Answer 20

literally means the employee have a option to either buy or not buy the stock so if the price goes down they dont take a loss but if it goes up they still buy at the option price

Question 21

what is the retention affect

Answer 21

when individules decide to continue to invest in the company

Question 22

what causes the retention affect to reverse

Answer 22

when the stock price falls below the strike price

Question 23

what does the company have to do when you exersize your option

Answer 23

they have to buy shares on the market at current price and sell to you at your option price

Question 24

what are common problems with stock option

Answer 24

companies give them out a lot in the early stage and they are worth a lot more later one

Question 25

what is the primary market

Answer 25

this market is for companies sell direct to investors

Question 26

what is the secondary market

Answer 26

where regular people buy stocks

Question 27

what are intermediaries

Answer 27

etfs, banks, hedge funds

Question 28

what are mutral funds

Answer 28

bonds and equities

Question 29

what is a index fund

Answer 29

a collection of shares of companies think of the s&p500