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Stock Market Terms
stock
35
Economics
12th Grade
09/01/2010

Additional Economics Flashcards

 


 

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Term
common stock
Definition
in this type of stock, investors are voting owners of the company. The owners share in the success of company profits, but are at risk if the comapny falters.
Term
blue chip stocks
Definition

stock of a well-established and financially-sound company that has demonstrated its ability to pay dividends in both good and bad times.

 

prices fluctuate the least with these. they offer the smallest returns.

Term
Large Cap Stocks
Definition
Stocks issued by companies having a market capitalization between $10 billion and $200 billion(The Big Kahunas)
Term
Mid Cap "Secondary Stocks"
Definition
stocks issued by companies having a market capitalization between $2 billion and $10 billion
Term
Small Cap Companies "growth stocks"
Definition
stocks issued by companies having a market capitalization between $200 million to $2  billion
Term
penny stocks
Definition

a stock that sells for less than $1 a share.

 

these are the riskiest to invest in. The gains can be huge, but so can the losses!

Term
Sector Stocks
Definition
a mutual fund whose objective is to invest in a particular industry or sector of the economy to capitalize on returns
Term
the 52 week high/low
Definition
the highest and lowest prices paid for the stock over the past year
Term
high/low
Definition
the highest and lowest prices paid for the stock on that day
Term
close
Definition
the price paid for the stock in the last trade of the day
Term
percent yield
Definition
equal to the dividend as a percentage of the stock price
Term
capital gains
Definition
the difference between from when you bought and sold a stock or fund
Term
P/E Ratio (Price to Earnings)
Definition
equal to the stock's current price divided by the company's earnings per share from the previous year
Term
Bear Market
Definition
A market condition in which the prices of securities are falling or are expected to fall
Term
Bear
Definition
an investor who acts on the belief that a security or the market is falling or is expected to fall
Term
bull
Definition
an investor who thinks the market, a specific security, or an industry will rise
Term
bull market
Definition
a market in which prices of a certain group of securites are rising or are expected to rise
Term
Dow Jones Average
Definition

a price-weighted average of 30 significant stocks trade on the New York Stock Exchange and the Nasdaq.

 

Often referred to as the "dow". the DJIA is the oldest and single most watched index in the world. the DJIA includes companies like General Electric, Disney, Exxon, and Microsoft.

Term
S&P 500
Definition
an index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index, with each stock's weight in the index proportionate to its market value
Term
selling short
Definition
borrow shares from your broker, then sell them and get the money
Term
short cover
Definition
buying shares back after borrowing them
Term
stock
Definition
a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings
Term
share
Definition
portion of a stock
Term
mutual fund
Definition
a security that gives small investors access to a well diversified portfolio of stock, bonds, and other securities
Term
portfolio
Definition

the group of assets--such as stocks, bonds, and mutual funds--held by an investor

 

to reduce their risk, investors tend to hold more than just a single stock or other asset. Think of this as a pie; each chunk is divided up into specific assets such as bonds, equities, etc.

Term
dividend
Definition
a cash payment from profits announced by a company's board of directors and distributed among stockholders
Term
Going Public: Initial Public Offering (IPO)
Definition
the process of selling shares that were formerly privately held to new investors for the first time
Term
SEC (Securities Exchange Commission)
Definition

a government commission created by Congress to regulate the securities markets and protect investors

 

the statutes administered by the ____ are designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securites markets

Term
stock split
Definition

the dividing of a company's existing stock into multiple shares

 

In a 2-for-1 split, each stockholder receives an additional share for each share they hold

 

reverse split--stocks are rolled back together

Term
volatility
Definition

a statistical measure of the tendency of a market or security to rise or fall sharply within a period of time

 

a highly volatile market means that prices have huge swings in very short periods of time

 

you can figure this by comparing the 52 week high/low

Term
preferred stock
Definition
the type of stock in which owners do not have voting rights, but dividend payments are guaranteed
Term
dip
Definition
a small decrease in the value of an investment that is quickly recovered
Term
spike
Definition
a small increase in the value of an investment
Term
bond
Definition
a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money
Term
net change
Definition
The difference between today's last trade and the previous day's last trade.
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