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BAMA106 > Stocks > Flashcards

Stocks Flashcards

1
Q

unit of ownership in a corporation
- equity investment

A

Stocks (Shares of Stocks)

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2
Q
  • owner of shares of stocks
A

Stockholder or Shareholder

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3
Q
  • dividends
  • gains on income/profit from Sale of stock
A

Earnings in Stock Investment

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4
Q

Classifications of Stocks
Based on Ownership or Rights of Stockholders

A
  • Common stock
  • Preferred stock
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5
Q

Classification of Stocks Based on the Nature of Business

A
  • Banks
  • Financial services
  • Industrial
  • Commercial
  • Mining
  • Oil
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6
Q

Classifications of Stocks
Based on Risk and Earnings Potential

A
  • Blue chips/Value stocks
  • Growth stocks
  • Cyclical stocks
  • Defensive stocks
  • Speculative stocks
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7
Q

Classifications of Stocks
4. Based on Market Capitalization
5. Marketability
6. Citizenship of Investors

A
    • Large-cap
      - Mid-cap
      - Small-cap
      - Micro-cap
  2. LISTED
    UNLISTED
  3. CLASS A
    CLASS B
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8
Q
  • represents basic ownership
  • carries extensive rights in the corporation
A

Common Stocks (Ordinary Shares)

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9
Q

Rights of Common Stocks Holder

A
  1. Voting rights
  2. Right to Dividends
  3. Pre-emptive rights
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10
Q
  • enjoys preference over common stock
    -> distribution of Dividends
    -> distribution of Assets (in case of liquidation)
A

Preferred Stocks (Preference Shares)

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11
Q
  • Belong to large corporations with long record of earnings & dividend payments
A

Blue chips/Value Stocks

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12
Q

Belong to corporations with growth rate faster than that of the general economy

A

Growth Stocks

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13
Q

Earnings & prices move with the changes in national economy

A

Cyclical Stocks

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14
Q

Earnings are not affected so much by changes in the economy

A

Defensive Stocks

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15
Q

Belong to companies that are expected to operate profitably in the future

A

Speculative Stocks

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16
Q

Stock Values

A

Par Value
Book Value
Net Asset Value
Market Value

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17
Q

nominal value assigned to a share

A

Par Value

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18
Q

value of a stock based on the value of stockholders’ equity per books of accounts

A

Book Value

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19
Q

value based on the current value of assets minus liabilities

A

Net Asset Value

20
Q

current market price; the closing price in the day-to-day trading in the stock exchange

A

Market Value

21
Q

Parties involved in Stock Investments

A
  1. Investor
  2. Stock market (Philippine Stock Exchange, PSE)
  3. Stock broker
  4. Stock clearing office
  5. Stock transfer office
22
Q

Steps in PSE Investment

A
  1. Open an account
  2. Place an order
  3. Settle transaction (t+3)
23
Q
  • issued by broker upon purchase of shares
A

Purchase confirmation

24
Q
  • issued if the investor allows the broker to have the
    investment under his name.
A

Street Certificate

25
Q
  • issued upon sale of stocks
A

Confirmation of Sale

26
Q
  • the least quantity that can be purchased depending on
    market price of a stock and the minimum investment
    that an investor in stock must have
A

Minimum Board Lot

27
Q
  • the speed at which prices go up and down
A

Price Volatility

28
Q
  • occurs when prices go up after going down for a number
    of days
A

Technical Rebound

29
Q
  • occurs when prices go down after going up for a number
    of days
A

Technical Correction

30
Q
  • the range within which the price of a stock may change
    in one day’s trading
  • set at 60% to 150% of the previous day’s closing price
A

Price Band

31
Q
  • the lowest price that a stock can command
  • the price at which buyers exceed sellers so that the
    tendency of the price is to go up
A

Price Support

32
Q
  • the highest price that a stock can command
  • price at which sellers exceed buyers so that the
    tendency of the price is to go down
A

Price Resistance

33
Q
  • prices increasingly move upwards
  • associated with investors’ optimism, economic recovery,
    government stimuli and political stability
A

Bullish Market

34
Q
  • prices are dropping continuously
  • associated with pessimism, economic downtrend,
    government constraints and political instability
A

Bearish Market

35
Q
  • practice of buying “low” and selling “high” the stocks that
    are in play
A

Timing the Market

36
Q
  • lowering average unit cost by buying more at lower
    prices
A

Down Averaging

37
Q
  • buying regularly regardless of whether the prices are low
    or high
A

Price Averaging

38
Q

Dates involved in Dividend declaration

A
  1. Date of Declaration
  2. … Record
  3. … Ex-dividend Trading
  4. … Issuance
39
Q

– date that the corporation is declaring or announcing the
dividend distribution

A

Date of Declaration

40
Q

– cut-off date in determining whose names are entitled to the
dividend

A

Date of Record

41
Q

date on which the stock is to be traded as separate from
the stock dividend, usually 2 – 4 days before official date of
record

A

Date of Ex-dividend Trading

42
Q

– date where the shareholder receives the dividends

A

Date of Issuance

43
Q
  • based on price trends and the attitude of investors
    toward a specific stock
A

Technical Analysis

44
Q
  • based on the value of the underlying corporation which
    is measured in terms of book value, net asset value,
    earnings per share and price-earnings ratio
  • value investing
A

Fundamental Analysis

45
Q

Guide to minimize risk in Stock Investments

A
  1. Do your homework
  2. Diversify stock investments
  3. Beat the market
  4. Avoid trading on margin
  5. Know when to cut losses
  6. Remain focused on long-term objectives
46
Q
  • Order to be observed from day-to-day until it is carried
    out or until the investor cancels it
A

Good Till Cancelled (GTC)

47
Q
  • Order to sell shares if prices go below a certain level in
    order to minimize loss
A

Stop Loss Order

BAMA106 (12 decks)

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