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Chapter Eight: The Stock Market
N/A
21
Economics
12th Grade
06/03/2014

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Term
Stock
Definition
Shares or portions of ownership in a corporation.
Term
Common Stock
Definition
The most prevalent type of stock that companies offer, represents the true ownership of the firm.
Term
Dividends
Definition
A distribution of a portion of the corporation's profits.
Term
Preferred Stock
Definition
Stock that carries less risk of loss because preferred shareholders have claim to the company's assets before the common shareholders if business losses force the corporation to close.
Term
Stockbroker
Definition
A person who generally works for a brokerage company & who specializes in buying & selling stocks on behalf of his clients.
Term
Commission
Definition
The fee paid for a stockbroker's services.
Term
Floor Traders
Definition
Stock traders physically present on the trading floor to execute requested trades.
Term
Tape
Definition
An electronic message board used to indicate stock prices & transactions.
Term
Initial Public Offering (IPO)
Definition
The initial sale of a company's stock through an investment bank.
Term
Stock Exchanges
Definition
Locations at which stock is traded.
Term
New York Stock Exchange (NYSE)
Definition
The most well-known & reputable stock market in the world.
Term
NASDAQ
Definition
The National Association of Securities Dealers Automated Quotations, the largest exchange that does not have a trading floor.
Term
American Stock Exchange (AMEX)
Definition
A lesser-known but still reputable American stock market.
Term
Stock Index
Definition
A group of stocks that analysts use to help identify stock trends in specific industries.
Term
Dow Jones Industrial Average (DJIA)
Definition
The most well-known American stock index.
Term
Standard & Poor's 500 (S&P 500)
Definition
A commonly reported investment index that includes five hundred stocks & is intended to give an even broader perspective on business in the United States than the DJIA.
Term
Mutual Funds
Definition
Privately managed stock portfolios.
Term
Stock Portfolio
Definition
A collection of stocks from different individual corporations.
Term
Speculation
Definition
Actively buying & selling stocks for the purpose of taking advantage of short-term price changes.
Term
Speculative Bubble
Definition
Stock prices rising in an industry or across the entire market simply because of rising expectations & rising in excess of the corporation's true value.
Term
Securities & Exchange Commission (SEC)
Definition
A governmental agency founded to ensure that corporations provide accurate & current information to the public about their financial situations & their business dealings.
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