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BAMA106 > Stocks > Flashcards

Stocks Flashcards

(47 cards)

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1
Q

unit of ownership in a corporation
- equity investment

A

Stocks (Shares of Stocks)

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2
Q
  • owner of shares of stocks
A

Stockholder or Shareholder

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3
Q
  • dividends
  • gains on income/profit from Sale of stock
A

Earnings in Stock Investment

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4
Q

Classifications of Stocks
Based on Ownership or Rights of Stockholders

A
  • Common stock
  • Preferred stock
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5
Q

Classification of Stocks Based on the Nature of Business

A
  • Banks
  • Financial services
  • Industrial
  • Commercial
  • Mining
  • Oil
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6
Q

Classifications of Stocks
Based on Risk and Earnings Potential

A
  • Blue chips/Value stocks
  • Growth stocks
  • Cyclical stocks
  • Defensive stocks
  • Speculative stocks
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7
Q

Classifications of Stocks
4. Based on Market Capitalization
5. Marketability
6. Citizenship of Investors

A
    • Large-cap
      - Mid-cap
      - Small-cap
      - Micro-cap
  2. LISTED
    UNLISTED
  3. CLASS A
    CLASS B
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8
Q
  • represents basic ownership
  • carries extensive rights in the corporation
A

Common Stocks (Ordinary Shares)

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9
Q

Rights of Common Stocks Holder

A
  1. Voting rights
  2. Right to Dividends
  3. Pre-emptive rights
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10
Q
  • enjoys preference over common stock
    -> distribution of Dividends
    -> distribution of Assets (in case of liquidation)
A

Preferred Stocks (Preference Shares)

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11
Q
  • Belong to large corporations with long record of earnings & dividend payments
A

Blue chips/Value Stocks

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12
Q

Belong to corporations with growth rate faster than that of the general economy

A

Growth Stocks

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13
Q

Earnings & prices move with the changes in national economy

A

Cyclical Stocks

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14
Q

Earnings are not affected so much by changes in the economy

A

Defensive Stocks

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15
Q

Belong to companies that are expected to operate profitably in the future

A

Speculative Stocks

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16
Q

Stock Values

A

Par Value
Book Value
Net Asset Value
Market Value

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17
Q

nominal value assigned to a share

A

Par Value

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18
Q

value of a stock based on the value of stockholders’ equity per books of accounts

A

Book Value

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19
Q

value based on the current value of assets minus liabilities

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A

Net Asset Value

20
Q

current market price; the closing price in the day-to-day trading in the stock exchange

21
Q

Parties involved in Stock Investments

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A
  1. Investor
  2. Stock market (Philippine Stock Exchange, PSE)
  3. Stock broker
  4. Stock clearing office
  5. Stock transfer office
22
Q

Steps in PSE Investment

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A
  1. Open an account
  2. Place an order
  3. Settle transaction (t+3)
23
Q
  • issued by broker upon purchase of shares
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A

Purchase confirmation

24
Q
  • issued if the investor allows the broker to have the
    investment under his name.
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A

Street Certificate

25
- issued upon sale of stocks
Confirmation of Sale
26
- the least quantity that can be purchased depending on market price of a stock and the minimum investment that an investor in stock must have
Minimum Board Lot
27
- the speed at which prices go up and down
Price Volatility
28
- occurs when prices go up after going down for a number of days
Technical Rebound
29
- occurs when prices go down after going up for a number of days
Technical Correction
30
- the range within which the price of a stock may change in one day’s trading - set at 60% to 150% of the previous day’s closing price
Price Band
31
- the lowest price that a stock can command - the price at which buyers exceed sellers so that the tendency of the price is to go up
Price Support
32
- the highest price that a stock can command - price at which sellers exceed buyers so that the tendency of the price is to go down
Price Resistance
33
- prices increasingly move upwards - associated with investors’ optimism, economic recovery, government stimuli and political stability
Bullish Market
34
- prices are dropping continuously - associated with pessimism, economic downtrend, government constraints and political instability
Bearish Market
35
- practice of buying “low” and selling “high” the stocks that are in play
Timing the Market
36
- lowering average unit cost by buying more at lower prices
Down Averaging
37
- buying regularly regardless of whether the prices are low or high
Price Averaging
38
Dates involved in Dividend declaration
1. Date of Declaration 2. ... Record 3. ... Ex-dividend Trading 4. ... Issuance
39
– date that the corporation is declaring or announcing the dividend distribution
Date of Declaration
40
– cut-off date in determining whose names are entitled to the dividend
Date of Record
41
date on which the stock is to be traded as separate from the stock dividend, usually 2 – 4 days before official date of record
Date of Ex-dividend Trading
42
– date where the shareholder receives the dividends
Date of Issuance
43
- based on price trends and the attitude of investors toward a specific stock
Technical Analysis
44
- based on the value of the underlying corporation which is measured in terms of book value, net asset value, earnings per share and price-earnings ratio - value investing
Fundamental Analysis
45
Guide to minimize risk in Stock Investments
1. Do your homework 2. Diversify stock investments 3. Beat the market 4. Avoid trading on margin 5. Know when to cut losses 6. Remain focused on long-term objectives
46
- Order to be observed from day-to-day until it is carried out or until the investor cancels it
Good Till Cancelled (GTC)
47
- Order to sell shares if prices go below a certain level in order to minimize loss
Stop Loss Order

BAMA106 (12 decks)

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