Equity Securites

Question 1

What is an equity security?

Answer 1

A form of stock that grants ownership to the buyer often referred to as a share

Question 2

What does negotiable mean ?

Answer 2

That a stocks can be freely traded

Question 3

What is Capital Appreciation ?

Answer 3

It is the increase in value of owned shares

Question 4

What is a Capital Gain ?

Answer 4

The profit earned after the sale of a share

Question 5

What is a long position ?

Answer 5

A positive number of shares in an account

Question 6

What is a short position ?

Answer 6

A negative number of shares in an account

Question 7

What is a Bullish sentiment?

Answer 7

An expectation that market price will increase

Question 8

What is a Bearish sentiment?

Answer 8

An expectation that a market price will fall

Question 9

What are the possible outcomes of closing a position ?

Answer 9

Capital gain, Capital loss, breakeven

Question 10

What is the ideal outcome for a long position?

Answer 10

Buy low, sell high to see the maximum Capital gain

Question 11

What is the ideal outcome for a short position ?

Answer 11

Sell high, buy low in order to maximize Capital gains