Stock Market Flashcards
1
Q
Stocks
A
Ownership of a company
2
Q
Shares
A
Parts of ownership
3
Q
What to do with earnings?
A
- Pay dividends
2. Reinvest
4
Q
Two ways to make money
A
Pay dividends and capital gain
5
Q
Four theories of the stock market
A
Firm foundation
Castle in the air
Random walk
Long term timing
6
Q
Three step thought process:
A
- Save
- Invest
- Spend
7
Q
If the current market price is lower than the intrinsic value you?
A
Buy
8
Q
If the current market price is higher than the intrinsic value you?
A
Sell
9
Q
Yield=
A
Dividend per share/ current price x100
10
Q
PE=
A
Current price/earnings per share
11
Q
PD=
A
Current price/dividend per share
12
Q
If yield is above 4.5
A
Buy
13
Q
If PE is below 14
A
Buy
14
Q
If PD is below 27
A
Buy
