STOCKS AND BONDS Flashcards
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.
STOCKS
It represents debt. When a company issues a bond, it is issuing debt with an agreement to pay the money back with interest.
BONDS
Share in the ownership of a company.
STOCKS
Share in the company’s profit.
DIVIDEND
Ratio of the dividends to the number of shares.
DIVIDEND PER SHARE
A place where stocks can be bought or sold.
STOCK MARKET
The current price of a stock at which it can be sold.
MARKET
Ratio of the annual dividend per share and the market value per share.
STOCK YIELD RATIO
Also called current stock yield
STOCK YIELD RATIO
The per share amount as stated on the company certificate.
PAR VALUE
Interest-bearing security which promises to pay a stated amount of money on the maturity date and coupons.
BOND
Periodic interest payment that the bondholder receives during the time between purchase date and maturity date.
COUPON
The rate per coupon payment period; denoted by r
COUPON RATE
The price of the bond of purchase time, denoted by P
PRICE OF BOND
Number of years from time of purchase to maturity date.
TERM
Present value of all cash inflows to the bondholder.
FAIR PRICE OF BOND
Measure of a portion of the stock market.
STOCK MARKET INDEX
Represents a particular sector.
SECTOR INDICES
The number of individual buy orders and the total number of shares they wish to buy.
BID SIZE
The price that sellers of the stock are willing to pay for the stock.
BID PRICE
The price the sellers of the stock are willing to sell the stock.
ASK PRICE
How many individual sell orders have been placed in the online platform and the total number of shares these sellers wish to sell.
ASK SIZE
A measure of a portion of a bond market.
BOND MARKET INDEX
Analysis of various public information about a stock.
FUNDAMENTAL ANALYSIS
Analysis of patterns in historical prices of a stock.
TECHNICAL ANALYSIS
Asserts that stock prices already incorporate all past market trading data and information.
WEAK FORM OF EFFICIENT MARKET THEORY
Asserts that stock prices already incorporate all publicly available information only.
SEMISTRONG FORM OF EFFICIENT MARKETING THEORY
Asserts that stock prices already incorporate all information (public and private).
STRONG FORM OF EFFICIENT MARKETING THEORY
Eugene Fama; stock prices reflect all the available information about the stock.
EFFICIENT MARKET HYPOTHESIS (1970’s)
