Chapter 1

Question 1

Intangible asset that may be bought sold or gifted between persons. May be represented by a paper certificate or held in an electronic record

Answer 1

Security

Question 2

Represents equity, means holder of the security has ownership in something

Answer 2

Stock

Question 3

Represents debt, IOU an investor holds. issuer (debtor) has to pay according to terms of agreement

Answer 3

Bond

Question 4

Stock a corporation has issued and then later brought back

Answer 4

Treasury Stock

Question 5

Issued stock that is in the hands of the investor and not the company

Answer 5

Outstanding stock

Question 6

How do you determine Market Cap for a Company?

Answer 6

Current Market Value x Outstanding Shares

Question 7

Large cap stocks that have a long history of paying dividends

Answer 7

Blue-Chip Stocks

Question 8

In order to be Large cap stock how much in market cap does a company need?

Answer 8

10 billion

Question 9

In order to be Mid cap stock how much in market cap does a company need?

Answer 9

2 billion to 10 billion

Question 10

In order to be small cap stock how much in market cap does a company need?

Answer 10

250 million to 2 billion

Question 11

What are the 3 different types of dividends?

Answer 11

Cash, Stock and Product

Question 12

How often are cash dividends issued?

Answer 12

quarterly

Question 13

This is when an investor is issued additional shares opposed to cash and the end of a quarter, and this reduces the cost basis of their position.

Answer 13

Stock Dividend

Question 14

When a company’s board approves a dividend payment. This is also when the payable date and record date is established.

Answer 14

Declaration date

Question 15

In order to qualify for a dividend, when does a customer need to purchase a stock?

Answer 15

one business day before the record date

Question 16

Who sets the ex-dividend date?

Answer 16

Regulator (an exchange or firna)

Question 17

How many votes does a stockholder have per share?

Answer 17

One

Question 18

stockholder to cast 1 vote per per share for each item on the ballot. this type benefits larger shareholders

Answer 18

Statutory voting

Question 19

Stockholder to allocate their total votes in any manner they choose. This type benefits the smaller investor

Answer 19

Cumulative voting

Question 20

What is the form 10-K?

Answer 20

audited performance of a companies financials for the year

Question 21

Increase in market price of a security

Answer 21

Capital Gain

Question 22

If dividends are stopped or reduced, this type of preferred stock will receive all unpaid dividends in arrears when BOD decides to pay. These are paid before any dividends are distributed to common stockholders

Answer 22

Cumulative

Question 23

Preferred stock type that allows a company to buy back from investors at a stated price on a specific day.

Answer 23

callable preferred

Question 24

preferred stock that allows the holder to exchange the shares for a fixed number of common stock. typically has a lower stated dividend payment.

Answer 24

convertible preferred

Question 25

preferred stocks that have variable dividend rates. usually tied to other benchmarks such as treasury bills

Answer 25

adjustable rate preferred

Question 26

preferred stock where holders could get more than their fixed dividend if the profits after all other dividends are paid.

Answer 26

participating preferred

Question 27

If a company goes bankrupt, whats the order of payment to shareholders and debtors?

Answer 27

Debtholders, preferred stock, then common stock