65 Definitions Deux Flashcards
Common Stock
MIGHT Pay Dividends
DOES HAVE Voting Rights
DOES HAVE Preemptive Rights
Define Statutory Voting
ONE vote for EACH VACANCY per ONE share
Define Cumulative Voting
Total Number of Votes = Number of Shares X Number of Vacancies
Preemptive Rights
- Can Be Sold for Value
- the Exercise Price is BELOW CMV (Current Market Value)
- They are attached to STOCKS
- SHORT TERM
Warrants
- LONG TERM
- Attached to BONDS
- CAN be detached and sold separately
- Exercised ABOVE CMV (Current Market Value)
ADRs
American Depository Receipts (ADRs)
- Issued and held by U.S. Commercial Banks
- Represents ownership of a foreign company’s shares listed on Foreign Exchanges
- Allows investors to avoid problems associated with foreign securities such as:
Currency conversion
Certification Registration
Trade Administration
Restricted Stock
- Can NOT be transferred until certain conditions are met
- Acquired through PRIVATE offering(s)
- MANDATORY holding periods
ESOPs
Employee Stock Option Plan(s)
- Employee non-cash compensation
- Employees can purchase stock in the future ata pre-determined price
- Used as an incentive for employer’s future growth
Three Key Facts regarding FUNDAMENTAL ANALYSIS
- Economics-based
- Monetarism-Driven
- Federal Reserve Board (FRB)-driven
4 Major Issues of Fundamental Analysis
- ) Monetary policies from Federal Reserve Board
- ) FISCAL vs MONETARY policy
- ) Economic Indicators
- ) Specific Company Balance Sheet and Income Statement Analysis
P/E Ratio
- Measures HOW EXPENSIVE the stock is RELATIVE TO ITS EARNINGS
Earnings Per Share
*the higher the ratio, the more expensive it is
Price to Book Ratio
COMPARES the CMP (Current Market Price) of a stock TO ITS CALCULATED BOOK VALUE
* A low # may indicate that the stock is out of favor with investors and/or a good market value.
P/B Ratio = CMP/Book Value Per Share
***Book Value = All Company Assets - All Liabilities
TECHNICAL ANALYSIS is also known as
“QUANTITATIVE ANALYSIS”
Define “Short Interest”
Number of Outstanding shares that Investors have/are SELLING SHORT
Technical Analysis Terms
- Head and Shoulders
- Support and Resistance
- Top-Down
- Bottom-Up
- Consolidation Pattern
- 200 Day Moving Average
- Volume of Shares Traded
- VIX
Technical Analysis is useful in determining what?
PRICE and TIME
Who Utilize Technical Analysis the most?
MARKET MAKERS and TRADERS
Fundamentalists tell _______ whereas Technicicans tell ____________
- ) WHATto buy
2. ) WHEN to buy and sell
Define the DIVIDEND DISCOUNT MODEL
Determines value of stock today by determining PRESENT VALUE OF ALL FUTURE DIVIDENDS
- It uses anticipated dividends and discounts them to determine present value
Define the DIVIDEND GROWTH MODEL
Uses growth rare on Present Dividend and Projects Future Income
- If growth is expected, it usually indicates higher-quality value
Unit Investment Trusts issue what?
SBI aka SHARES OF BENEFICIAL INTEREST
Open-End Mutual Funds
- Issue REDEEMABLE shares
- Largest group in terms of Management Companies
- BOUGHT and SOLD DIRECTLY FROM MUTUAL FUND COMPANY
Closed-End Mutual Funds
- Issue NON-redeemable Shares
- Trade via EXCHANGES
- More Liquid
- Trade Like Stocks
Face Amount Certificates
- One of the THREE Types of Management Companies
- Issue DEBT CERTIFICATES
- Sold at a DISCOUNT
- RARELY Used anymore