Series 6 Flashcards
Participating Preferred Stock
Entitled to its stated dividend and also to additional dividends as a specified percentage of dividends on common stock, if declared.
Cumulative Preferred Stock
Offers the holder any unpaid dividends in arrears. These dividends accumulate and must be paid to the cumulative preferred stockholder before any dividends may be paid to the common stockholders.
Convertible Preferred
An equity security that can be exchanged for common stock at specified prices or rates.
Callable Preferred
A type of preferred stock issued with a provision allowing the corporation to call in the stock at a certain price and retire it.
Broker
1) Individual or firm that charges a fee or commission for executing buy and sell orders submitted by another individual or firm.
Dealer
1) An individual or firm engaged in the business of buying and selling securities for its own account, either directly or through a broker. 2) The role of a firm when it acts as a principal and charges the customer a markup or markdown.
Long is the act of…
buying.
Short is the act of…
selling.
Short
The selling of a security, contract, or commodity that the seller does not own.
Par value
Meaningless for common stock. May have meaning for preferred stock.
Book value
A measure of the net worth of each share of common stock.
Market value
Price at which investors buy or sell a share of common stock or bond at a given time. Market value is determined by buyer and seller interaction.
Put
A put option gives the buyer the right to put (sell) a security to someone.
The buyer of the put has the right to…
sell.
The seller of the put has the obligation to…
buy.
