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CFMP > Equities: Investing and Trading > Flashcards

Equities: Investing and Trading Flashcards

1
Q

“The difference between a company’s current assets and current liabilities”?

A

Working capital

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2
Q

“The ownership interest that shareholders hold in a company’s assets and earnings”?

A

Equity

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3
Q

What are the conditions or restrictions that a company must adhere to when issuing debt securities known as?

A

Debt covenants/conditions

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4
Q

“The general trend of the Philippine Stock Exchange”?

A

PSEI (Philippine Stock Exchange Index)

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5
Q

“A type of stock offering where existing shareholders are given the option to purchase new shares at a lower price than the market price”?

A

Stock Rights Offering (SRO)

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6
Q

“The total value of a company’s outstanding shares of stock, calculated by multiplying the stock’s current market price by the total number of outstanding shares”?

A

Market Capitalization

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7
Q

“A date when a company announces its intention to pay dividends to shareholders”?

A

Dividend Declaration Date

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8
Q

What type of stock offers voting rights to shareholders and is last in line to claim assets and dividends in case of liquidation?

A

Common Stocks

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8
Q

What type of order in stock trading specifies the maximum or minimum price at which you are willing to buy or sell shares?

A

Limit Order

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9
Q

Identify the term for “Income from a stock, given once a year.”

A

Cash Dividend

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9
Q

“A professional who facilitates stock trading transactions on behalf of investors”?

A

Stock Broker

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10
Q

“The date when a company verifies who are entitled to receive dividends”?

A

Record Date

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10
Q

“The maximum and minimum price of the stock for the day”?

A

Trading Threshold

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11
Q

“A competitive business plan for a company”?

A

Sensible business plan

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11
Q

“A protective measure to avoid price manipulation in stock trading”?

A

Trading Threshold

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11
Q

“Frequent buying and selling in stock trading”?

A

Scalp Trading

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12
Q

“A rise in the price of a stock, offering potential return.”

A

Capital Appreciation

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12
Q

“An organized market for tradable stocks where brokers buy and sell stocks”?

A

The Stock Exchange

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13
Q

“Shares of the company’s subsidiary as dividends”?

A

Property Dividends

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14
Q

“Determining the amount on your account that you are willing to risk in trading.”

A

Position Sizing

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15
Q

Enumerate the three primary reasons why companies need funds.

A
  1. Capital expenditures
  2. working capital
  3. paying off/refinancing existing debt
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16
Q

Enumerate the key components of a company’s balance sheet equation

A

Assets = Liabilities + Equity.

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16
Q

List the types of interest rates that can be associated with debt securities

A

Fixed, variable, or both

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17
Q

Name the two locations of the Philippine Stock Exchange (PSE).

A

Makati and Ortigas

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18
Q

List the key features of the Philippine Stock Exchange (PSE).

A

One price policy for both floors, double-auction market, fully automated.

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19
Q

List the six sector indices of the Philippine Stock Exchange (PSE)

A

Financial
Industrial
Holding Firms
Property
Services
Mining & Oil

19
Q

What steps must a person who wants to buy stocks go through? Enumerate them.

A

Pass through a broker and have a statement of account.

20
Q

Enumerate the qualifications for a company to be included in the PSEI.

A

Public float, liquidity, and market capitalization

21
Q

Enumerate the four types of stock classification based on their claim on revenues

A

Common Stocks
Preferred Stocks
Warrants

22
Q

List the three types of dividends

A

Cash Dividend
Stock Dividend
Property Dividend

22
Q

income from a stock

A

Cash Dividend

23
Q

additional shares issued

A

Stock Dividend

24
Q

dividends in kind

A

Property Dividend

25
Q

Enumerate the key dates involved in the payment of dividends

A

Dividend Declaration Date
Ex-Dividend Date
Record Date
Payment Date

26
Q

Enumerate the two main segments of the stock market.

A

Primary Market
Secondary Market

27
Q

List the the types of stock trading orders

A

Market Order
Limit Order
Day Order
Good ‘Till Cancelled (GTC)
Stop Loss Order

28
Q

Enumerate the four trading styles in the stock market.

A

Position Traders
Swing Traders
Day Traders
Scalp Traders.

29
Q

Name the three criteria for company analysis

A

Sensible business plan
Solid Management
Financial Analysis

30
Q

Enumerate the steps in determining position sizing in trading

A

Determine the amount willing to risk
Consider diversification

31
Q

List the types of stock offerings, including their abbreviations

A

IPO (Initial Public Offering)
2PO (Secondary Public Offering)
SRO (Stock Rights Offering)

32
Q

Enumerate the components of the settlement date (T+2) process in stock trading

A

Transaction Date + 2 days (Settlement Date)
Sellers receive funds after 2 days

32
Q

What are the three primary reasons why companies need funds?

A

Financial capital expenditures
working capital
paying off/refinancing existing debt

32
Q

Enumerate the factors that stock traders should consider in a trading plan

A

Goals
Risk tolerance
Realistic expectations

33
Q

epresents the general trend of the Philippine Stock Exchange and is composed of the 30 most active companies in the market.

A

PSEI

34
Q

Companies need funds for financial capital expenditures, working capital, and maintaining a certain level of equity

A

True

35
Q

In the equation “Assets = Liabilities + Equity,” assets represent what a company owes to others.

A

False

36
Q

Debt securities issued by companies can have either fixed or variable interest rates, but not both

A

False

37
Q

The Philippine Stock Exchange (PSE) operates with a one-price policy for both its branches in Makati and Ortigas.

A

True

38
Q

The PSEI represents the 30 most active companies in the Philippine Stock Exchange, and its composition remains constant.

A

False

39
Q

High inflation tends to increase purchasing power, making it a favorable time to invest in stocks

A

False

40
Q

Preferred stocks grant shareholders voting rights and are the first to claim assets and dividends in case of liquidation.

A

False

40
Q

True or False: Stock traders should have an aggressive profile to succeed in the market.

A

True

40
Q

The Stock Rights Offering (SPO) is typically offered to the public before existing shareholders.

A

False

41
Q

Scalp trading involves frequent buying and selling of stocks within a single trading day.

A

True

41
Q

Day traders aim to hold positions for the medium to long term.

A

False

42
Q

In an IPO (Initial Public Offering), shares of a company are first offered to the existing shareholders before the public.

A

False

43
Q

Dividend Declaration Date is the date when dividends are credited to shareholders’ accounts.

A

False

44
Q

Sensible business plan, solid management, and financial analysis are key components of company analysis.

A

True

44
Q

Record Date is the date when a company announces its intention to pay dividends.

A

False

44
Q

Good ‘Till Cancelled (GTC) orders remain open in succeeding trading days until they are executed or cancelled

A

True

45
Q

Stop Loss Order is used to limit an investor’s losses on a position

A

True

46
Q

Diversification involves concentrating all investments in a single asset to maximize returns

A

False

47
Q

Property dividends can include shares of the company’s subsidiary or physical assets

A

True

48
Q

Position sizing involves determining the amount you are willing to risk in trading.

A

True

CFMP (1 decks)

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