Using Securities Markets for Financing and Investing Opportunities (19 L.S.) Flashcards Preview

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Flashcards in Using Securities Markets for Financing and Investing Opportunities (19 L.S.) Deck (42)
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1

What is the first public offering of a corporation's stock?

Initial public offering (IPO)

2

____ involves buying several different types of investments to spread the risk of investing.

Diversification

3

Preferred stockholders are given preference over common stockholders in:

-The payment of dividends
-The claim on company assets

4

List the steps in investing in stocks and bonds in order.

1-decide what stock/bond to invest in
2- find a stockbroker
3- the stockbroker negotiates a price and places an order
4- the trade is reported to your broker, who then notifies you

5

Type of specialist assists in the issue and sale of new securities...

Investment Bankers

6

Stocks of corporations in emerging fields such as technology and biotechnology or Internet-related firms, whose earnings are expected to grow at a faster rate than other stocks, are referred to as ____ stocks.

Growth Stocks

7

Institutional investors are large organizations such as pension funds, mutual funds, and insurance companies that...

invest in their own funds or the funds of others

8

Bonds that are not backed by any collateral such as equipment are called ____ bonds.

Debenture bonds

9

The members of a stock exchange such as the NYSE...

-Buy and sell securities for companies and individuals

10

A(n) ____ order tells the broker to buy or sell a stock at specific price, if that price becomes available.

limit order

11

Securities that are not traded on registered stock exchanges are traded on...

over-the-counter (OTC) market

12

An action by a company that gives stockholders two or more shares of stock for each one they own is called a(n) ___ ___.

Stock Split

13

Buying stock on margin

Purchasing stocks by borrowing some of the purchase cost from the brokerage firm

14

Propectus

-is a condensed version of the registration statement
-it must be sent to prospective investors

15

Share of ownership in a company are called

Stocks

16

The positive difference between the purchase price of a stock and its sale price is called ___ ____.

Capital gain

17

What are stocks of public utilities that usually offer investors a high dividend yield that generally keeps pace with inflation?

Income stocks

18

The ____ is a telecommunication network that links dealers across the nation, so that they can buy and sell securities electronically rather than in person.

NASDAQ

19

Cash payments or additional shares of stock that are distributed to stockholders from corporate profits are called...

Dividends

20

A(n) ____ fund buys stocks and bonds and then sells shares in those securities to the public.

Mutual Fund

21

What is the payment that the issuer of the bond makes to the bondholders for use of the borrowed money?

Intrest

22

The exact date the issuer of a bond must pay the principal to the bondholder is called the ___ ___.

maturity date

23

The Dow Jones Industrial Average is the average cost of ____ selected industrial stocks.

30

24

What is provided in a STOCK QUOTE?

-The highest and lowest price the stock traded for that day
-The stock's high and low over the past 52 weeks
-The dividend paid (if any)
-The stock's dividend yield
-imported ratios like the price/earnings ratio
-Earnings per share

25

The primary purpose of a SINKING FUND is to...

ensure that enough money will be available to repay bondholders on the bond's maturity date.

26

What type of stock is the most basic form of ownership in a firm?

Common Stock

27

Advantages of ISSUING BONDS:

-Bondholders are creditors of the firm, not owners.
-Bond interest is a business expense and tax-deductible to the firm
-Bonds are a temporary source of funding
-Bonds can be repaid before the maturity date if they are callable

28

Bonds that is high-risk, high-interest

Junk Bonds

29

Bonds can range from the highest quality to ___ bonds.

Junk bonds

30

Exchange-traded funds are collections of stocks, bonds and other investments that are....

traded more like individual stocks than like mutual funds