Chapter 1 Flashcards
Declares dividends
Board of directors
When a firm acts as a broker
Commission is charged
Firm acts as dealer
Mark up or mark down included
Outstanding shares formula
Issued shares - treasury stock = outstanding shares
Market capitalization formula
Outstanding shares x current market price = market capitalization
market capitalization of greater than $10 billion
Large-cap stocks
large-cap index
S&P 500
They have market capitalization of between $2 billion and$10 billion.
Mid-cap stocks
Russell 1000
a mid-cap index
have market capitalization of below 2 billion.
Small-cap stocks
The Russell 2000
Small-cap index
Defensive stocks
Protect investors during a recession
the opposite of defensive stocks
Cyclical stocks
Statutory voting favors
investors who own more shares(larger stockholders).
Formula for dividend yield
Dividend Yield = Annual Dividends ÷ Current Market Price
Stocks or portfolios with high betas have
more risk
lower betas have
less risk
The Bid and NAV are
redemption prices
(i.e., customers sell at the bid).
If a portfolio or stock has a beta that is greater than 1.0
it is more risky than the market
