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Definition
| When the proceeds of the sale of securities ends up in teh account of the company selling them. |
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Definition
| When the proceeds of a securities sale ends up in the account of an investor. |
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| The regulation that governs the sale of new securities. |
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Term
| Securities and Exchange Commission (SEC) |
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Definition
| The agency of the U.S. government that accepts and reviews the information aobut securities issuers. |
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Definition
| The people who own a corporation. |
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| The owners would only lose the money that they have invested in the business, and not their own personal savings. |
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| Articles of Incorporation |
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Definition
| The company's governing document, spelling out how the corporation is to be run. (Also known as corporate charter or certificate of incorporation) |
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Definition
| A type of artificial person that is formed under state law order to operate a business. It is a separate entity from the people who own it. |
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Definition
| the number of shares that a corporation is permitted to issue; the number of shares can only be changed by a majority vote of the stockholders. |
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Definition
| The stock that the corporations sells or distributes to investors. |
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Definition
| Shares that have not been distributed. |
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Term
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Definition
| reacquired shares, or shares a company distributed then bought back. |
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Definition
The stock the corporation has distributed minus any shares that it has bought back.
Issued Stock - Treasury Stock = Outstanding Stock |
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Definition
| Proof of stock ownership in the company; states the name of the corporation, the owner's name, and the # of shares owned. |
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Term
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Definition
| This person keeps a list of all stockholders and is responsible for cancelling old stock certificates and issuing new ones with the shares are transferred. |
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Term
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Definition
| The right of shareholders to sell, give away, or leave shares to their heirs. |
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Term
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Definition
| The right of stockholders have access to inspect certain books and record of the company, including stockholders' list and the minutes of stockholders' minutes. |
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Term
Shares of stock in a corporation are called equity securities because of:
A) Shareholders have limited liability.
B)Shareholders have an ownership interesest in the company.
C)Shareholders receive a guaranteed return on their investment.
D)Shareholders may freely transfer their shares. |
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Definition
| B)Shareholders have an ownership interesest in the company. |
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Term
| A stock certificate includes all of the following: |
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Definition
Shareholder's Name
The number of shares
The company's name |
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Term
| Who gives persmission for the number of authorized shares? |
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Definition
| The stockholders based on a majority vote. |
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Term
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Definition
| The sale of bonds to gain capital. |
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Term
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Definition
| The sale of stocks in order to gain capital. |
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Term
| Initial Public Offering (IPO) |
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Definition
| When a company issues stock to the public for the first time. |
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Definition
| The basic unit of corporate ownership; sold at par value. |
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Definition
| Usually issued by larger, more established companies; holders recieve a dividend before common stockholders. |
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Term
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Definition
Determines who receives a dividend first.
1) Bondholders
2) Preferred Stockholders
3) Common Stockholders |
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Term
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Definition
| Payments that a corporation makes to its shareholders out of its earnings. |
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Term
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Definition
| Last possible date to own shares and receive a dividend. |
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Term
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Definition
| When the Board of Directors declares a dividend. |
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Term
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Definition
| When a dividend is sent to shareholders. |
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Term
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Definition
| Usually only common stock holders have these rights. |
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Term
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Definition
| By signing this, shareholders give someone else the authority to vote their shares on their behalf. |
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Term
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Definition
Shareholders vote each of their shares once for each director position.
Shares x Positions = Votes
100 x 5 = 500 |
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Term
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Definition
| Shareholders may multiply the number of shares they own by the number of directors being elected and can vote anyway they wish; tends to favor minority shareholders. |
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Term
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Definition
| A way to divide stock so that it is cheaper and more attractive to investors when it seems to expensive. |
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Term
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Definition
| A solution to make stock more expensive by grouping it together to raise the price. |
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Term
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Definition
| A solution to increase the price of shares by repurchasing some of its shares on the open market. |
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Term
| An investor whose primary goal is appreciation would most likely invest in: |
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Definition
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Term
| Who is responsible for deciding if a company will pay a dividend to its shareholders? |
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Definition
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Term
| A stock split _______ the value of the company's stock. |
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Definition
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Term
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Definition
One way of categorizing a stock according to the value of all the company's outstanding common shares.
Outstanding Shares x Current Price = |
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Term
| Large-Capitalization (Large-cap) Stocks |
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Definition
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Term
| Middle-Capitalization (Mid-cap) Stocks |
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Definition
| Between $2 billion and $10 billion |
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Term
| Small-Capitalization (Small-cap) Stocks |
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Definition
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Term
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Definition
| Are the common stocks of large established companies that have a long steady history of profits and dividends and a reputation for good management. |
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Term
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Definition
| Are issues of a company whose sales and earnings are growing faster than the overall economy. |
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Term
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Definition
| Are stocks of companies that pay higher than average dividends. |
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Term
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Definition
| Stocks of companies that tend to remain profitable, even when the economy is in a recession. |
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Term
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Definition
| Stocks whose prices tend to rise and fall with the fluctuations in the general economy. |
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Term
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Definition
| Shares of companies that are in the early stages of development. |
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Term
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Definition
| Low-priced, speculative stocks that sell for $5 or less per share and trade over-the-counter. |
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Term
| American Depositary Receipt (ADR) |
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Definition
| A receipt for shares of the stock of a foreign company that have been deposited into a foreign branch of the U.S. bank; purpose is to facilitate trading in foreign securities in the U.S. |
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Term
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Definition
| The main advantage of equity securities for investors, particularly common stocks, is there potential for long-term capital appreciation. |
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Term
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Definition
| The incrase in the value of the stock is not taxable until the investor sells teh stock and receives a "capital gain". |
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Term
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Definition
| The higher the potential returns from an investment, the greater the risk of losing money. |
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Term
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Definition
| If the business prospers, then the values of the shares increases. If the business fails, then shareholders lose their investment. |
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Term
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Definition
| The prices of individual stocks are influenced by the overall performance of the stock market. |
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Term
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Definition
A measurement of market risk.
Less than 1 = more stable
1 = in line with market
Greater than 1 = more volatile |
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Term
| Cumulative Preferred Stock |
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Definition
| All the preferred dividends that are in arrears (behind in payment) must be paid before the common stockholders can receive any dividends; the is what most preferred stock is. |
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Term
| Noncumulative Preferred Stock |
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Definition
| Dividends in arrears are not paid to stockholders; only the current dividend needs to be paid before common stock dividends may be paid. |
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Term
| Participated Preferred Stock |
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Definition
| Stock that may receive a higher dividend if the company is doing well and its common dividends exceed a certain amount. |
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Term
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Definition
| A company who has this type of preferred stock had the right to repurchase the stock at a specified price some time in the future. Usually the call price is higher than the price at which the stock was issued. |
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Term
| Convertible Preferred Stock |
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Definition
| Can be exchanged for shares of common stock. |
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Term
| Which are best suited for an investor who is mainy interested in a reliable source of income? |
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Definition
| Preferred stock - is more likley to pay regular dividends |
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Term
| Octopus Computer Co. has issued convertible preferred stock with a par value of $100 and a conversion ration of 5-for-1. What's the stock's conversion price? |
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Definition
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Term
| Preferred stock pays investors a guaranteed dividend. True or False? |
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Definition
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Term
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Definition
| Gives a shareholder less influence in a company; occurs when more shares are issued to the public. |
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Term
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Definition
| The right to buy soem of the new shares before they are offered to the public. |
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Term
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Definition
| The process of offering rights to common stockholders. |
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Term
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Definition
| Resemble stock rights in that they give the purchaser the option of buying commin stock in the future, at a specificed price; good for several years after they are issued and are usually issued attachd to a bond or a stock. |
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Term
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Definition
| is a contract between two parties, which gives one of them the right to buy or sell at a set price for a limited period of time. |
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Term
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Definition
| The owner has the right to buy stock at a specificed price. The writer has the corresponding oblication to sell the security if the owner exercision the option. |
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Term
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Definition
| The owner has the right to sell the stcok at the strike price, whil the writer assumes the obligation to buy the stock if required to do so by the owner of this option. |
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Term
| Four Common Types of Options |
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Definition
1. Equity Options
2. Stock Intex Options
3. Interest Rate Options
4. Foreign Currency Options |
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Term
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Definition
| Each of these options represents 100 shares aof a particular stock; has right to buy and sell to the writer. |
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Term
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Definition
| This option tracks the performance of a particular group of stocks or stock markets. |
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Term
| Interest Rate (Debt) Options |
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Definition
| These options give the owner the right to buy or sell a group of bonds (debt securities) at a set prices. |
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Term
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Definition
| This option utilizes specific amounts of foreign currency. |
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Term
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Definition
| is a way of protecting oneself against investment risks; if the security being protected loses value, then this instrument will increase in value. |
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Term
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Definition
| Someone who sells calls on stock they they own. |
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Term
| What might a company offer investors as an extra incentive to purchase its bonds? |
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Definition
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Term
| Mr. Holland just sold 10 Tulip.com calls. Mr. Holland probably believes that the price of shares in Tulip.com is going to: |
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Definition
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Term
Options can be written on all of the following instruments EXCEPT:
Common stocks
Stock indexes
Foreign Currencies
Warrants |
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Definition
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Term
What is the correct ranting of securities from the shortest to longest life:
Options
Rights
Warrants |
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Definition
1. Rights
2. Options
3. Warrants |
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