Part 3 Flashcards
ADR
facilitate the trading of foreign securities in the US securities market
technical analysis
analyst charts of a stock market price and volume over a period of time
Trends, support & resistance, moving averages
Fundamental analysis
looks at the companys financial statement
Discounted cash flow
commonly used to value debt securities
Bond’s price will always reflect a yield equal to current market interest rates for comparable risk
investments company act of 1940
face-amount certificate, unit investment trust, a management company
12b-1 fees
marketing and promotion of annual expense
max of .75%
ETF’s
traded on exchanges or Nasdaq
bought on margin and sold short
REIT’s
mortgage trust, not flow through
90% of income distributed
Forward contracts
two-party contracts, nonliquid, nonstandardized,
term negotiated: Quantity, quality, time, place, price
Futures Contracts
exchange regulated
Quantity, quality, time, place, price
Long buyer
obligated to take delivery
Short Seller
Obligated to make delivery
Cost of using options
commissions to buy and sell
benefits of using long options
leverage increases return percentage
less capital at risk
long put has less risk than short stock sale
Insurance - hedging
Benefits of using short options
income from the premium
partial hedge
Call hedge long stock positions to extent of premium
Put hedge short stock positions to extent of premium
