Final

Question 1

What is the difference between…
Income VS Growth Stock
Defensive VS Cyclical Stock

Answer 1

By dividend…

1) Income Stock
- Pays dividend regularly (Guaranteed payment)
2) Growth Stock
- Pay few/no dividend. The reason is that the company reinvests $ into the business so value will go up.

3) Defensive Stock
- Luxury industries for good economic times.
4) Cyclical Stock
- Necessities for not so good economic times.

Question 2

What are the Dow Jones, S&P 500, and the NASDAQ Composite?

Answer 2

1) Dow Jones
An index that shows how certain stocks have traded
- 30 largest companies in various industry
- changes to represent stock market overall

2) S&P 500
An index that shows the price changes of 500 different stocks.
- mainly NYSE

3) NASDAQ Composite
- National Association of Securities Dealers Automated Quotations
- The American market for OTC securities.

Question 3

What is the 52-week high high/low?

Answer 3

The highest/lowest value of a stock over a 52 week period.

Question 4

What is dividend?

Answer 4

The portion of corporate profits paid out to holders

- paid 4 times a year

Question 5

What is yield?

Answer 5

Dividend over the price. Want a higher yield.

Question 6

What is price-to-earning ratio?

Answer 6

Price to earning. Compares company to competitors. How much an investor is willing to pay for $1 of company earnings. Speaks of demand. Can show over value and under value.

Question 7

What is earning-per-share?

Answer 7

Earnings per share. Shows how much each share is worth in relation to how much company is making.