STOCKS AND BONDS

Question 1

Are also referred to as equity. When a person buys a stock, they are buying a share of a company, making them a partial owner.

Answer 1

STOCKS

Question 2

It represents debt. When a company issues a bond, it is issuing debt with an agreement to pay the money back with interest.

Answer 2

BONDS

Question 3

Share in the ownership of a company.

Answer 3

STOCKS

Question 4

Share in the company’s profit.

Answer 4

DIVIDEND

Question 5

Ratio of the dividends to the number of shares.

Answer 5

DIVIDEND PER SHARE

Question 6

A place where stocks can be bought or sold.

Answer 6

STOCK MARKET

Question 7

The current price of a stock at which it can be sold.

Answer 7

MARKET

Question 8

Ratio of the annual dividend per share and the market value per share.

Answer 8

STOCK YIELD RATIO

Question 9

Also called current stock yield

Answer 9

STOCK YIELD RATIO

Question 10

The per share amount as stated on the company certificate.

Answer 10

PAR VALUE

Question 11

Interest-bearing security which promises to pay a stated amount of money on the maturity date and coupons.

Answer 11

BOND

Question 12

Periodic interest payment that the bondholder receives during the time between purchase date and maturity date.

Answer 12

COUPON

Question 13

The rate per coupon payment period; denoted by r

Answer 13

COUPON RATE

Question 14

The price of the bond of purchase time, denoted by P

Answer 14

PRICE OF BOND

Question 15

Number of years from time of purchase to maturity date.

Answer 15

TERM

Question 16

Present value of all cash inflows to the bondholder.

Answer 16

FAIR PRICE OF BOND

Question 17

Measure of a portion of the stock market.

Answer 17

STOCK MARKET INDEX

Question 18

Represents a particular sector.

Answer 18

SECTOR INDICES

Question 19

The number of individual buy orders and the total number of shares they wish to buy.

Answer 19

BID SIZE

Question 20

The price that sellers of the stock are willing to pay for the stock.

Answer 20

BID PRICE

Question 21

The price the sellers of the stock are willing to sell the stock.

Answer 21

ASK PRICE

Question 22

How many individual sell orders have been placed in the online platform and the total number of shares these sellers wish to sell.

Answer 22

ASK SIZE

Question 23

A measure of a portion of a bond market.

Answer 23

BOND MARKET INDEX

Question 24

Analysis of various public information about a stock.

Answer 24

FUNDAMENTAL ANALYSIS

Question 25

Analysis of patterns in historical prices of a stock.

Answer 25

TECHNICAL ANALYSIS

Question 26

Asserts that stock prices already incorporate all past market trading data and information.

Answer 26

WEAK FORM OF EFFICIENT MARKET THEORY

Question 27

Asserts that stock prices already incorporate all publicly available information only.

Answer 27

SEMISTRONG FORM OF EFFICIENT MARKETING THEORY

Question 28

Asserts that stock prices already incorporate all information (public and private).

Answer 28

STRONG FORM OF EFFICIENT MARKETING THEORY

Question 29

Eugene Fama; stock prices reflect all the available information about the stock.

Answer 29

EFFICIENT MARKET HYPOTHESIS (1970’s)