business final review Flashcards
financial diversification
strategy pf investing in a wide variety of securities in order to reduce risk
mutual fund
institutional investor that raises funds by selling shares to investors and uses the accumulated funds
exchange traded fund
shares traded on securities market that represent the legal right of ownership over part of a basket of individual stock certificates or other securities
public offering
primary market issue in which new securities are offered to any investors willing and able to purchase them
initial public offering (IPO)
first time a company issues stock that may be bought by the general public
underwriting
arrangement under which an investment banker agrees to purchase all shared of a public offering at an agreed-upon price
registration statement
long, complex document that firms must file with the SEC when they sell securities through a public offering
private placement
primary market issue that is negotiated between the issuing corporation and a small group of accredited investors
accredited investor
organization or individual investor who meets certain criteria established by the SEC and so qualifies to invest in unregistered securities
stock exchange
organized venue for trading stocks and other securities that meet its listing requirements
over-the-counter market
securities that are not listed on exchanges are traded
Electronic communications network (ECN)
automated securities trading system that automatically matches buyers and sellers, executing trades quickly and allowing trading when securities exchanges are closed
discount broker
provide basic services needed to buy and sell securities but offer fewer additional services
full-services brokers
provide a wide range of services in addition to carrying out trades
market orders
an order telling a broker to buy or sell a specific security at the best currently available price
limit orders
an order to a broker to buy a specific stock only if its price is below a certain level, or to sell a specific stock only if its price is above a certain level
stock index
statistic that tracks how the prices of specific set of stocks has changed
DIJA
index that tracks stock prices of 30 large, well-knwon US corporations
Standard and Poor’s 500
stock index based on prices of 500 major US corporations in a variety of industries and market sectors
NASDAQ
all domestic and foreign common stocks traded
Wilshire 500
stock prices of all US corporations with actively traded stock
Russell 2000
stock prices of 2000 relatively small but actively traded
FTSE 100
stock prices of 100 actively traded companies
Nikkei 225
stock prices of 225 actively traded companies