2. Stocks and Bonds ☆ Flashcards
Shares of ownership in a corporation
Stocks
Also known as “Shares or Equity”
Stocks
Stockholders, also known as?
Stockbuyers
Stockholders share what?
Capital
Comprised of more than half of the totality of the company’s stock; they HAVE THE RIGHT TO VOTE.
Common Stock
They have NO VOTING RIGHT; but they are guaranteed a FIXED DIVIDEND.
Preferred Stock
The marketplace for stock.
Stock exchange
A certificate or proof which proves that a company/corporation borrowed money from a certain group of individuals/investors for a definite period of time.
Bonds
Bonds have?
Interest
Amount stated in the bond, to be used by the issuer in calculating the interest.
Face Value
Amount of the interest
Dividend
Interest rate the bond issuer uses to calculate the interst payment.
Dividend rate
Dividend rate, also called?
Yield
Interval dates
Coupon dates
When the bond will mature
Maturity date
Amount to be paid to the bondholder on the coupon date
Maturity Value
Tool used by market investors & commerical managers in describing the stock market.
Market index
Market Index is the?
Weighted Average Value
Used to reflect the hypothetical portfolio of the stock market
Stock Index
Compares the treasury bills/corporate bonds
Bond Index
A belief that in an efficient market, all participant investors are aware of allavailable, relevant market information.
Theory of Efficient Markets
Risks caused by changes in market prices of equities/bonds.
Price Risk
Borrower’s failure to pay.
Credit Risk
Inability to sell/convert assets into cash on time.
Liquidity Risk
Risk due to political, economic, or social events in a country.
Country Risk
