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Intro to Business > Exam 2 > Flashcards

Exam 2 Flashcards

1
Q

stock exchange

A

organization whose members can buy and sell securities for the companies and investors

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2
Q

OTC market

A

exchange that provides a means to trade stocks not listed on the national exchanges

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3
Q

equity financing

A

money raised from within the firm from operations or through the sale of ownership in the firm (stock or venture capital)

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4
Q

debt financing

A

funds raised through various forms of borrowing that must be repaid

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5
Q

common stock

A

the most basic form of ownership in a firm; has voting rights, right to share in profits through dividends, if offered by the firm’s board of directors

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6
Q

preferred stock

A

stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stock holders if the company sells it’s assets

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7
Q

participating preferred stock

A

gives the holder the right to receive dividends equal to the normally specified rate that preferred dividends receive as well as an additional dividend based on some predetermined condition

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8
Q

convertible preferred stock

A

preferred stock that includes an option for the holder to convert the preferred shared into a fixed number of common shares

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9
Q

cumulative preferred stock

A

preferred stock whose annual fixed-rate dividend, if it cannot be paid in any year, accrues until it can and is paid before common dividends

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10
Q

mutual fund

A

an organization that buys stocks and bonds and then sells shares in those securities to the public

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11
Q

exchange-traded funds

A

collections of stocks that are traded on exchanges but are traded more like individual stocks than like mutual funds

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12
Q

long trading

A

buy low and sell high

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13
Q

short trading

A

sell high and buy low

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14
Q

margin trading

A

buy with partial down payment of at lease 50% (loan from broker)

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15
Q

options trading

A

right to buy or sell stock at a fixed price at a fixed date in the future (high risk)

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16
Q

bond

A

a corporate certificate indicating that a person has lent money to a firm

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17
Q

maturity date

A

the exact date the issuer of a bond must pay the principal to the bondholder

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18
Q

sinking fund

A

reserve account in which the issuer of a bond periodically retires some part of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond

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19
Q

corporate bond

A

bond issued by a corporation in order to raise financing for a variety of reasons (usually for longer-term debt and matures within a year)

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20
Q

municipal bond

A

a security issued by or on behalf of a local authority; usually exempt from federal taxes

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21
Q

agency bond

A

a security issued by a US govnt-sponsored agency or federal budget agency (backed by the govnt)

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22
Q

T-bill

A

matures in less than a year; issued with a minimum denomination of $1,000

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23
Q

treasury note

A

matures in 10 years or less; sold in denominations of $1,000 up to $1,000,000

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24
Q

treasury bonds

A

matures in 25 years or more; sold in denominations of $1,000 up to $1,000,000

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25
Dow Jones Industrial Average
the average cost of 30 selected industrial stocks, used to give an indication of the direction of the stock market over time
26
bid & asked price
bid: most any buyer will pay asked: least any seller is willing to accept
27
SEC
federal agency that has responsibility for regulating the various exchanges
28
NASDAQ
nationwide electronic system that communicates over-the-counter trades to brokers
29
federal reserve bank
regional bank of the federal reserve system, the central banking system of the US
30
reserve requirement
central bank regulation employment by lost, but not all, of the world's central banks, that sets the minimum fraction of customer deposits and notes that each commercial bank must hold, rather than lend out
31
discount rate
interest rate that the Fed charges for loans to member banks
32
open-market operations
the buying and selling of US govnt bonds by the Fed with the goal of regulating money supply
33
FDIC (federal deposit insurance corp)
an independent agency of the US govnt that insures bank deposits
34
commercial bank
a profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans
35
investment bank
bank that purchases large holdings of newly issued shares and resells them to investors
36
annual report
yearly statement of financial condition, progress, and expectations of an organization
37
FASB (financial accounting standards board)
private, non-profit organization is to establish and improve accepted accounting principles within the US
38
PCAOB (public company accounting oversight board)
private-sector, nonprofit corp created by SARBOX
39
SARBOX
2002 federal law that set new accounting standards for publicly traded companies
40
audit
job of reviewing and evaluating the informations used to prepare a company's financial statements
41
income statement
shows a firm's profit after costs, expenses, and taxes
42
statement of shareholders equity
represents the capital received from investors in exchange for stock
43
balance sheet
assets, liabilities, and owners' equity- reports a firm's condition
44
statement of cash flows
shows how changes in the BS and income affect cash
45
accounting equation
assets= liabilities+SHE
46
independent auditor's report
evaluation and unbiased opinion about the accuracy of a company's financial statements
47
financial accounting
accounting information and analyses prepared for people outside of the organization
48
managerial accounting
process of identifying, measuring, analyzing, interpreting, and communicating information
49
GAAP
framework of accounting standards, rules, and procedures (US)
50
IFRS
set of accounting standards developed by an independent, not-for-profit organization called IASB
51
CPA
accounting professional
52
CMA
professional designation in the accounting and finance world
53
gross national product
total value of goods and services by a country during one year (equal to GDP plus the net income from foreign investments)
54
gross domestic product
total value of goods and services in a country during one year
55
frictional unemployment
entering work force or change of career
56
structural unemployment
unemployment caused by restructuring or mismatch between skills
57
cyclical unemployment
occurs bc of a recession or similar downturn
58
seasonal unemployment
labor varies over the year
59
consumer price index
monthly statistics that measure the pace of inflation or deflation
60
producer price index
index that measures prices at the wholesale level
61
exporting
selling products to another country
62
international licensing
one company gives another company permission to manufacture its product for a specified payment
63
international franchising
license that allows a franchisee to have access to a business' proprietary knowledge and trademarks to provide a service under the business' name
64
FDI (foreign subsidiary)
controlling ownership i na business enterprise in one country by an entity based in another country
65
international joint ventures
when two businesses based in two or more countries form a partnership
66
countertrading
form of bartering where several countries may be involved in trading goods for goods or services for services

Intro to Business (6 decks)

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