business vocab quiz Flashcards
Bull vs Bear Market -
Bull is when the stock market prices are rising and bear is when they are falling
The Different Markets: The Dow, NASDAQ, TSX, NYSE, S & P -
Each market is a combination of stocks that allow you to gauge the average condition of current stocks.
Saving: Savings Account, GIC’s, RESP -
A safe place to deposit money while it accumulates interest and withdraws it. It is safe and you shouldn’t lose profits and permits you to withdraw money whenever you want. Your money may not be used to its potential advantages: low risk, low reward.
Stocks-
A stock is a share or ownership in a company, stocks have potential for increase in profits and many pay dividends, but most stocks also come with a risk should their value go down and not up.
Common Stock -
A type of security, also known as equity shares. These stocks give the owner voting rights to shareholders. Common stockholders have no guarantee to get money back if a company goes down and is liquidized.
Preferred Stock -
A preferred stock is a stock that provides no voting rights to shareholders, and have higher rates of return as they are somewhat riskier than common stock, they also have a higher chance for reward.
Preferred stocks also have a fixed dividend, you gain a steady stream of dividends. With preferred stocks.
Real Estate-
Real estate is a class of “real property” that includes land and anything permanently attached to it, whether natural or man-made.
There are five main categories of real estate: residential, commercial, industrial, raw land, and special use.
You can invest in real estate directly by purchasing a home, rental property or other property, or indirectly through a real estate investment trust (REIT).
Penny Stocks-
A small company stock worth less than $5.
Assets-
An asset is something containing economic value and/or future benefit.
An asset can often generate cash flows in the future, such as a piece of machinery, a financial security, or a patent.
Personal assets may include a house, car, investments, artwork, or home goods.
For corporations, assets are listed on the balance sheet and netted against liabilities and equity.
Dividends-
Dividends are payments that a company makes to its investors on its outstanding shares. They are made up of a company’s profit or retained earnings, in an amount set by a company’s “dividend policy.” A company pays dividends on both its common and preferred shares.
Short Selling -
Short selling is an advanced stock exchange technique that someone may use if they predict a stock is going to go down in value. To short sell someone will borrow or receive a loan of a stock from someone else, usually their broker. Then sell that stock to other investors. If the stock goes down in price as they predicted then they will buy the stocks back from those people for the cheaper price and return the stock to the original loaner. This method of exchange is high risk high reward and it is very easy to lose money on this quickly and mount debt.
Stock splits-
A stock split is when a company divides the existing shares of its stock into multiple new shares to boost the stock’s liquidity.
Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because the split does not add any real value.
The most common split ratios are 2-for-1 or 3-for-1, which means that the stockholder will have two or three shares, respectively, for every share held earlier.
Reverse stock splits are the opposite transaction, where a company divides, instead of multiplies, the number of shares that stockholders own, raising the market price accordingly.
Industry-
Economic activity concerned with the processing of raw materials and manufacture of goods in factories.
P/E Ratio
Compares stock price to earnings. Ex; 100 shares earnings $200= $2 P/E divided by stock price. You want a low P/E ratio.
EPS
Earning per share. Profits/shares. You want a high eps because it shows a company with better profitability. A limitation may be how much the company has put in and the debt they have accumulated.
