Important Securities terms Flashcards
(19 cards)
What are securities?
Broad term for stocks, bonds, mutual funds, and other financial instruments.
What are equities?
Represent ownership in a corporation.
What is common stock?
Type of stock granting voting rights and potential dividends.
What is preferred stock?
Type of stock with fixed dividends, typically no voting rights.
What are dividends?
Distributions of company profits to shareholders.
What are debt securities?
Represent loans to companies or governments.
What is principal?
Amount borrowed, to be repaid at maturity.
What is maturity?
Date when principal must be repaid.
What is interest?
Cost of borrowing money, paid by borrower to investor.
What are mutual funds?
Pooled investments offering diversification and professional management.
What is diversification?
Spreading investments to reduce risk.
What is liquidity?
Ease of buying or selling an investment.
What is the primary market?
Where securities are first issued to raise capital.
What is the secondary market?
Where existing securities are traded among investors.
What are broker-dealers?
Firms facilitating buying and selling of securities.
What are exchanges?
Centralized marketplaces for trading securities.
What is the Over-the-Counter (OTC) market?
Decentralized, electronic marketplace for trading securities.
What is the Securities and Exchange Commission (SEC)?
Primary regulator of U.S. securities markets.
What are self-regulating organizations (SROs)?
Non-governmental organizations enforcing industry rules.
