Investing Flashcards
Memorise
What is the sharemarket?
The place where the buying and selling of shares takes place
Who participates in the sharemarket?
Buyers, sellers, companies and stockbrokers
What is the obligation of companies on the sharemarket?
To keep everyone informed about events that have/will affect share price so no one is disadvantaged
What is a bid?
An offer to buy shares, includes the amount of shares and the price you are willing to pay
What is an offer?
An order to sell shares, includes the amount of shares and the price you are willing to sell for; could be specific or just the best price on the market
What is volume (in commerce)?
How many shares you’d like to buy/sell
What is a share?
Partial ownership of a company
What is a float?
AKA an Initial Public Offering (IPO) from the business itself (primary market)
What is the secondary market?
The sharemarket, where shares that have already been bought from a float are traded
What are dividends?
Payments from a company to its investors
How do you calculate dividend yield?
Annual dividends per share/price per share = return p.a
Are dividends guaranteed?
No, the company could experience a loss or choose to reinvest their profits into the company
How many times a year are dividends paid
2 times
What are the dividend dates called?
Interim and Final
How many days does it take for a transfer of share ownership?
3 days
What is the ex-dividend date?
If you buy shares on or after it, you don’t qualify for the latest dividend
What is the date that dividends are paid called?
Record date
At what time must you be on the register on a record date to receive dividends?
5pm
When should you buy shares to receive dividends?
When they are trading cum-dividend, not ex-dividend
What is investing?
Allocating money or other resources in the expectation of some future benefit (return)
Why do individuals invest?
To grow their wealth so they can achieve a good quality of life in the future; financial gains aren’t always achieved immediately
Why do businesses invest?
Invest for the production of goods/services to provide profit to the owners ASAP
What do businesses invest in?
- Infrastructure, labour, research
- Smaller businesses
How often is profit in a business paid?
Annually