Stock Market Review Sheet Flashcards
What is the difference between common and preferred stock?
Preferred stockholders receive a fixed dividend from the company, while common shareholders may or may not receive one
How do shareholders receive money from a company?
When its stock is issued
How does a company get money from shareholder?
Shareholders get money by a corporation earning profits, which increases stock value, or through dividends that are distributed to stockholders by a business when it earns profits.
What does IPO stand for?
Initial public offering
What does it initial public offering when a company goes public?
Going public refers to a private company’s initial public offering (IPO), thus becoming a publicly traded and owned entity. Businesses usually go public to raise capital in hopes of expanding
What are dividends?
A portion of the company’s profits paid to its shareholders
How does risk affect the rate of return on your investment?
The higher the risk, the more you’re able to gain (or lose).
What are the two major stock exchanges in the United States?
New York Stock Exchange, NASDAQ
What is a tombstone ad?
Found on the wall street journal
What is the difference between a public and private corporation?
The public company refers to a company that is listed on a recognized stock exchange and traded publicly
What is a stock split?
An issue of new shares in a company to existing shareholders in proportion to their current holdings.
What does a stock symbolize?
That the price movement of a stock indicates what investors feel a company is worth
What are capital gains?
a profit from the sale of property or an investment.
What are capital losses?
the difference between a lower selling price and a higher purchase price, resulting in a financial loss for the seller
What is diversification? Why is it important?
Having your stocks have ones from different types of industries rather than all from one type of industry. It decreases the risk of losing money from your stocks.
