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Key Words Flashcards

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1
Q

What is a Stock?

A

A stock represents a SHARE in the ownership of a company, including a claim on the company’s EARNINGS and ASSETS.

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2
Q

What is a Share?

A

A share represents a unit of EQUITY in a company.

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3
Q

What is a Shareholder?

A

An owner of SHARES in a company.

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4
Q

What is a Stock Exchange?

A

A market in which SECURITIES are bought and sold.

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5
Q

What is a Public Company?

A

A company whos SHARES are traded freely on a STOCK EXCHANGE.

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6
Q

What is a Bull Market?

A

A market in which SHARE prices are RISING.

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7
Q

What is a Bear Market?

A

A market in which SHARE prices are FALLING.

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8
Q

What is Volatility?

A

When a market or SECURITY experiences periods of unpredictable, and sometimes sharp, price movements - INDEXES which FLUCTUATE in the market.

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9
Q

What is Volume?

A

The total number of SHARES or CONTRACTS exchanged between buyers and sellers of a SECURITY during trading hours on a given day.

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10
Q

What is Capital?

A

The physical or financial resources used to produce VALUE in an economy.

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11
Q

What is Liquidity?

A

The ease with which an ASSET or SECURITY can be converted into ready cash without affecting its MARKET PRICE.

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12
Q

What is a Bubble?

A

An economic cycle that is characterised by the RAPID escalation of MARKET VALUE, particularly in the price of ASSETS.

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13
Q

What is an IPO?

A

Initial Public Offering

When a private company becomes public by selling its SHARES on a STOCK EXCHANGE.

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14
Q

What are Dividends?

A

A SHARE of profits and retained earnings that a company pays out to its SHAREHOLDERS and owners.

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15
Q

What are Blue-chip Stocks?

A

Big companies known for being VALUABLE, STABLE and ESTABLISHED.

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16
Q

What is FOREX?

A

The Foreign Exchange

The global marketplace for the trading of one nations currency for another.

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17
Q

What is a Portfolio?

A

A collection of financial investments like STOCKS, BONDS, COMMODITIES, CASH, and CASH EQUIVALENTS, including CLOSED END FUNDS and ETFS.

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18
Q

What are Holdings?

A

The contents of an INVESTMENT PORTFOLIO held by an individual or entity.

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19
Q

What are Interests?

A

The MONETARY charge for borrowing investments.

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20
Q

What are Bonds?

A

A DEBT SECURITY.

A loan from an investor to a borrower such as a company or government.

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21
Q

What is a Security?

A

A wide array of investments, such as STOCKS, BONDS, NOTES, DEBENTURES, LIMITED PARTNERSHIP INTERESTS, oil and gas interests, and INVESTMENT CONTRACTS.

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22
Q

What is a Broker?

A

Individuals who buy and sell STOCKS, SHARES and SECURTIES for retail and institutional clients through a STOCK EXCHANGE or OTC in return for a fee.

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23
Q

What is an Asset?

A

A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

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24
Q

What is a Commodity?

A

A good sold for production or consumption just as it was found in nature.

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25
What is Yield?
How much income an investment generates, separate from the principle.
26
What is P/E Ratio?
Price to Earnings Ratio Measures a companys SHARE PRICE relative to its EPS.
27
What is an Index?
A method to track the performance of a group of ASSETS in a standardised way.
28
What are Futures?
A type of derivative contract agreement to buy or sell a specific COMMODITY, ASSET or SECURITY at a set future date for a set price.
29
What are Options?
A form of derivative financial instrument in which two parties contractually agree to transact an ASSET at a specified price before a future date.
30
What are Call Options?
A contract between a buyer and seller to purchase a certain STOCK at a certain price up until a defined expiration date.
31
What are Put Options?
Gives the holder the right, but not the obligation, to sell a STOCK at a certain price in the future.
32
What are ETFs?
Exchange-Traded Funds Funds that trade on an EXCHANGE, generally tracking a specific INDEX.
33
What are Passive ETFs?
Seek to replicate the performance of a specific BENCHMARK INDEX or ASSET class without requiring active decision-making.
34
What are Active ETFs?
A portfolio manager/team who adjusts the investments within a fund as desired while not being subject to the rules of tracking an INDEX.
35
What is Liability?
What a person or company owes as of the date of the BALANCE SHEET.
36
What are Penny Stocks?
A small companys SHARES that typically trade for lower than £5 a per share.
37
What are Market Caps?
A measurement of a companys size; the total value of a companys outstanding SHARES of STOCK (Inclues public, restricted and insider shares).
38
What is Leverage?
Using debt (borrowed funds) to amplify returns from an investment or project.
39
What is a Balance Sheet?
A financial statement that reports a companys ASSETS, LIABILITIES and SHAREHOLDER EQUITY.
40
What is Inflation?
Measures how much more EXPENSIVE a set of goods and services has become over a certain period.
41
What is a Bid?
The highest price a buyer will pay to buy a specified number of SHARES of a STOCK at any given time.
42
What is a Ask?
The LOWEST price a seller will sell the STOCK
43
What is Bid/Ask Spread?
The DIFFERENCE between the highest price that a buyer is willing to pay for an ASSET and the lowest that a seller is willing to accept.
44
What is a Limit Order?
An order to buy or sell a STOCK with a restriction on the maximum price to be paid (with a BUY LIMIT) or the minimum price to be received (with a SELL LIMIT).
45
What is a Stop-loss Order?
An order placed with a BROKER to buy or sell a specific STOCK once it reaches a certain price.
46
What is a Market Order?
An order to buy or sell a STOCK at the markets best available price.
47
What is a Day Order?
A stipulation placed on an order to a BROKER to execute a trade at a specific price that expires at the end of the trading day if not completed.
48
What is Averaging Down?
A strategy to buy MORE of an ASSET as its price FALLS, resulting in lower overall average purchase price.
49
What is Fading?
A trading technique in which a trader assumes that a RAPID upward movement is overdone and takes a SHORT position on a possible reversal.
50
What is a Hedge Fund?
Financial partnerships that employ various strategies in an effort to MAXIMISE returns for their investors.
51
What are Mutual Funds?
A type of investment that pools money from many people to invest in a variety of ASSETS like STOCKS, BONDS or other SECURITIES.
52
What is Control Stock?
EQUITY SHARES owned by MAJOR SHAREHOLDERS of a publicly traded company.
53
What is a Holding Company?
A parent company that is created to buy and control the ownership interests of other companies.
54
What are Subsidiaries?
A company that belongs to another company, usually the PARENT or HOLDING company.
55
What is an Index Fund?
A PORTFOLIO of STOCKS or BONDS designed to mimic the composition and performance of a financial markets index.
56
What is Day Trading?
Buying and selling SECURITIES RAPIDLY - often in less than a day.
57
What is Swing Trading?
Taking trades that last a couple of days up to several months in order to PROFIT from an anticipated price movem
58
What is Intrinsic Value?
A measure of what an ASSET is worth.
59
What is Book Value?
The value of a business according to its books or accounts, as reflected on its FINANCIAL STATEMENTS.
60
What is Price-to-Book Ratio?
The companies currrent STOCK price per SHARE divided by its book value per share (BVPS).
61
What is Value Investing?
Practitioners aim to identify STOCKS whose prices don't reflect what they're really worth.
62
What is Growth Investing?
The process of investing in companies l, industries, or sectors that are currently GROWING and are expected to continue their expansion over a substantial period of time.
63
What are Earnings-per-Share?
A measure of a companys PROFITABILITY l, calculated by dividing quarterly or annual income by the number of outstanding STOCK SHARES.
64
What is Technical Analysis?
The study of historical MARKET DATA, including price and volume.
65
What is Fundamental Analysis?
A method of assessing the INTRINSIC VALUE of a SECURITY by analysing various MACROECONOMIC and MICROECONOMIC factors.
66
What is Efficient Market Hypothesis?
Argues that markets are efficient, leaving no room to make EXCESS profits by investing since everything is already fairly and accurately priced.
67
What is Supply and Demand?
Supply is the markets ability to PRODUCE a good or service. Demand is the markets DESIRE to purchase the good or service.
68
What is Insider Trading?
Buying or selling a publicly traded companys STOCK by someone with NON-PUBLIC material information about that company.
69
What is a Ticker Symbol?
A unique combination of letters and numbers that represent a particular STOCK or SECURITY listed on an exchange.
70
What is Compound Interest?
INTEREST that applies not only to the initial principle of an investment or loan, but also to the ACCUMULATED INTEREST from previous periods.
71
What is a Profit Margin?
A common measure to the degree to which a company or a particular business activity makes money.
72
What is 'Return on Investments'?
A metric used to understand the PROFITABILITY of an investment.
73
What is Equity?
The VALUE that would be returned to a companies SHAREHOLDERS if all the ASSETS were LIQUIDATED and all the companys debts were paid off.
74
What is a Float?
Duplicate money present in the banking system during the time between a deposit being made in the recipients account and the money being deducted from the senders account.
75
What is Trade?
The voluntary exchange of goods or services between different economic actors.
76
What is a Secondary Offering?
When an investor sells their SHARES to the public on the SECONDARY MARKET after an IPO.
77
What is Common Stock?
A type of tradable ASSET or SECURITY that equates to ownership in a company (the type of stock most people buy).
78
What is the Secondary Market?
Where the SECURITIES are traded after the company has sold its offering on the primary market.
79
What are Macroeconomics?
The branch if economics that deals with the STRUCTURE, PERFORMANCE, BEHAVIOUR and DECISION MAKING of the whole, or aggregate, economy.
80
What are Microeconomics?
The study of INDIVIDUALS, HOUSEHOLDS and FIRMS behaviour in decision making and allocation of resources.
81
What is a Sell Limit?
The MINIMUM price to be received.
82
What is a Buy Limit?
The MAXIMUM price to be paid.
83
What is a Benchmark?
A standard or measure that can be used to analyse the allocation, risk and return of a given portfolio.
84
What is Yield Rate?
How much income an investment generates, separate from the principle.
85
What is Over-the-Counter (OTC)?
A decentralized market in which market participants trade STOCKS, COMMODITIES, CURRENCIES etc directly between two parties (no central exchange or broker).
86
What are Closed End Funds?
A type of MUTUAL FUND that issues a fixed number of SHARES through one IPO to raise capital for its initial investments.
87
What are Notes?
A debt security obligating repayment of a loan, at a predetermined INTEREST RATE, within a defined time frame.
88
What are Debentures?
A marketing SECURITY that businesses can issue to obtain long-term financing without needing to put up COLLATERAL or DILUTE their EQUITY.
89
What are Investment Contracts?
A legal document between two parties where one party invests money with the interest of receiving a return.
90
What is Dilution?
The REDUCTION in the percentage of existing SHAREHOLDERS ownership in a company when it issues new SHARES of STOCK.
91
What is Collateral?
An item of value that a lender can seize from a borrower if they fail to repay a loan according to the agreed terms.
92
What is an Aggregate?
Variables that measure the total economic activity for a nation state or a region (the main economic aggregate is GDP).
93
What is GDP?
Gross Domestic Product - the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.
94
What is the Principle?
The baseline sum in financial transactions.

Stocks & Shares (2 decks)

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