Chapter 9 Flashcards
A company that issues stock to a small group of people
Private corporation (closely held corporation)
All the investments, stocks, bonds, mutual funds, options, and commodities that are bought and sold on the stock market
Securities
A corporation that sells its shares openly in stock markets, where anybody can open them
Public corporation
An assigned dollar value that is printed on a stock certificate
Par value
A safe investment that generally attracts conservative investors
Blue chip stock
Higher than average dividends compared to other stocks
Income stock
Issued by a corporation whose potential earnings may be higher than the average earning predicted for all the corporations in the country
Growth stock
A market value that tends to reflect the state of the economy
Cyclical stock
A stock that remains stable during declines in the economy
Defensive stock
Stock from a corporation that has issued a large number of shares of stock and has large amounts of capitalization
Large cap stock
The total amount of stocks and bonds issued by a corporation
Capitalization
A stock issues by a company with a capitalization of 500 million dollars or less
Small cap stock
A stock that typically sells for less than a dollar a share, although it can sell up to as much as $10 a share
Penny stock
A market condition that occurs when investors are optimistic about the economy and buy stocks
Bull market
A market condition that occurs when investors are pessimistic about the economy and sell stocks
Bear market
The annual dividend of an investment divided by the current market value
Current yield
A calculation that includes the annual dividend as well as any increase or decrease in the original purchase price of the investment
Total return
A corporation’s net, or after tax, earnings divided by the number of outstanding shares of common stock
Earnings per share
The price of one share of stock divided by the corporation’s earnings per share of stock over that last 12 months
Price earning ratio (PE)
A marketplace where brokers who represent investors meet to buy and sell securities
Securities exchange
A network of dealers who buy and sell stocks of corporations that are not listed on a securities exchange
Over the counter market (OTC)
A collection of all the securities held by an investor
Portfolio
