chapter 8 part 3

Question 1

what are retractable preffered shares?

Answer 1

they are shares that force a company to buy them back for cash on a specified date or on multiple possible dates. the owner of the retractable preffered can create a maturity date by exercising there right to retract on a specified date

Question 2

what is a soft retractable preffered?

Answer 2

A share that can be retracted into cash or common shares

Question 3

What is a floating rate preffered?

Answer 3

a preffered share with a dividend that is tied to interest rates. works the same as a floating debenture.

Question 4

what is a delayed rate, fixed rate, fixed reset, floater?

Answer 4

Preffered shares that are subject to fixed rate dividend for a period of time after which becomes variable.

Question 5

what is a foreign-pay preffered?

Answer 5

a canadian company can pay dividends in a foreign currency. Still receive dividend tax benefit

Question 6

what is a participating preffered?

Answer 6

Shares have certain rights to earnings of a company over the specified dividend

Question 7

what is a deferred preffered?

Answer 7

These shares do not pay a dividend they have a maturity date and are bought at a discount from redemption price much like a bond. the premium received at redemption is called a dividend premium

equals amount same as a regular dividend but is not eligible for a tax credit

Question 8

what do most index’s use to measure performance?

Answer 8

Companys market caps

Question 9

what is a market weighted index?

Answer 9

all the stocks in the index have an equal effect of index performance

Question 10

what are the 10 sectors of the S&P/TSX composite index?

Answer 10

Financials
energy
materials
industrials
consumer discretionary  
telecommunication services
information technology 
consumer staples 
utilities 
healthcare

Question 11

how to point changes and percentages work on an index?

Answer 11

the index has 250 points. 1% equals 2.5 points.

net point changes are not equal on all index’s

Question 12

is the dow jones industrial average weighted equally?

Answer 12

Yes some people criticize it for only have 30 stocks and being weighted making it not representative of the whole market

Question 13

is the S&P 500 weighted by market cap?

Answer 13

Yes bigger companies will have a greater effect than smaller ones

Question 14

what is the difference between a index and an average?

Answer 14

Index’s are weight by market cap percent change. averages are weighted using stock prices

Question 15

what are the 5 top indices in the USA?

Answer 15

1. The dow jones industrial average
2. The S&P 500
3. The New York stock exchange indexes
4. The NASDAQ composite
5. The value line composite