Stock Market Quiz Terms Flashcards
(20 cards)
Company
A business or association usually formed to manufacture or supply products or services for profit.
Corporation
A company legally separate from stockholders who own it and the managers who run it.
Entrepreneur
A person who organizes, operates, and assumes the risk for a business venture.
Partnership
A company owned and managed by two or more people who share its profits or losses. A partnership is not separate from its owners, who are liable for the company’s debts.
Private Corporation
A corporation that doesn’t sell shares to the public. You cannot buy shares of a private company in the stock market.
Public Corporation
The stock of a public company is owned and traded by individuals and institutional investors. In contrast, the stock is held by company founders, employees, and sometimes venture capitalists.
Sole Proprietorship
A company owned and run by one individual who receives its profits or bears its losses. A proprietorship is not separate from its owner, who is liable for the company debts.
Limited Liability
A person’s financial liability (responsibility) is limited to a fixed amount, most commonly the value of a person’s investment in a company or partnership. If a company with limited liability is sued, then the claimants are suing the company, not its owners or investors.
Common Stock
Shares of a company that do not guarantee a dividend and have more risks. Shareholders have the right to vote for board of directors
Preferred Stock
Those who buy this are non-voting owners of the company
Receive dividends before common stock owners
Stock Exchange
Secondary markets for buying and selling stocks
Stock Split
a company does this when the price of a stock becomes so high it discourages potential investors from buying it
Bull Market
a steady in the stock market over a period of time; investors expect an (increase) in profits and so buy stocks; 1980s and 1990s were the longest sustained bull markets
Bear Market
a steady drop in the stock market over a period of time; investors sell in expectation of lower (profits) in 2000 a multi year bear market began
Stock Broker
A person who links buyers and sellers to stock.
Initial Public Offering (IPO)
The first time a company makes it stock open to the public.
Dividend
part of the firm’s profits; paid 4 times a year; higher the profit, larger the dividend per share of stock
Capital Gains
the difference between a higher selling price and a lower purchase price; results in a financial gain for the seller
Capital Losses
the difference between a lower selling price and a higher purchase price, resulting in a financial loss to the seller
P/E Ratio
A company’s closing price divided by its latest annual earnings per share
