Stocks, Bonds, and Loans

Question 1

If the minuend (price sold) subtracted to the subtrahend (price bought) results in a positive difference

Answer 1

Gain

Question 2

If the minuend (price sold) subtracted to the subtrahend (price bought) results in a negative difference

Answer 2

Loss

Question 3

-Equity Security
-Represents a share/portion of the company
-Investment instrument for building wealth
-stockholder

Answer 3

Stocks

Question 4

-The share/portion distributed to stockholder

Answer 4

Dividend

Question 5

-company -issued
-Raise money for the company
-Promissory document (issued by a debtor) stating the amount of debt and pledge to pay back the pledged amount

Answer 5

Bonds

Question 6

Ratio of the dividend to the # of shares

Answer 6

Dividend per share (Profit / Total amount of shares)

Question 7

Multiply the formula above by the owned share to obtain the stockholder dividend

Answer 7

Stockholder Dividend (Dividend Per share x the owned share)

Question 8

current price of a stock in the current market

Answer 8

Market Value

Question 9

ratio of DpS and Market Value per Share

Answer 9

Stock Yield (DPS/MARKET VALUE)

Question 10

Per amount stated on the company certificate. Determined by the company. Stable over time

Answer 10

Par Value

Question 11

TOTAL COST OF STOCK FORMULA

Answer 11

(#ofsharesx Price per share) + commission

Question 12

TOTAL SELLING PRICE FORMULA

Answer 12

(#ofshares x selling price per share)

Question 13

Issues of debt (Stocks or Bonds)

Answer 13

Bonds

Question 14

Issues of stake of ownership in a company (Stocks or Bonds)

Answer 14

Stocks

Question 15

Shareholders are part-owners of the company (Stocks or Bonds)

Answer 15

Stocks

Question 16

Bondholders are lenders to the company (Stocks or bonds)

Answer 16

Bonds

Question 17

Dividend (Stocks or Bonds)

Answer 17

Stocks

Question 18

Interest (Stocks or Bonds)

Answer 18

Bonds

Question 19

There is no return guarantee and it is high risk (Stocks or Bonds)

Answer 19

Stocks

Question 20

There is a return guarantee and it is low risk. (Stocks or Bonds)

Answer 20

Bonds

Question 21

Can be issued by government or private institutions (Stocks or Bonds)

Answer 21

Bonds

Question 22

Can be issued by corporates (Stocks or Bonds)

Answer 22

Stocks

Question 23

states that the stock market reacts very fast to any information and at any given period,the market contains the total views of all the investors in the market.Thus, the proponents of the theory believe that the current price of the stock is the accurate reflection of the investors’ knowledge about the stock.

Answer 23

Efficient Market Theory

Question 24

is the measure of the value of a section of the stock market and is computed from the price of selected stocks. Investors And financial managers use this to describe the market and compare the return on specific investment. The stock index can also reflect the country’s economy.

Answer 24

Stock (market) index

Question 25

periodic interest payment that the bondholder receives during the time between purchase date and maturity date (Under gains and losses in bonds)

Answer 25

Coupon

Question 26

the rate per coupon payment period (Under gains and losses in bonds)

Answer 26

Coupon rate

Question 27

the amount payable in the maturity date (Under gains and losses in bonds)

Answer 27

Face Value

Question 28

fixed period of time (in years) at which the bond is redeemable.

Answer 28

Term of a Bond

Question 29

Lent to business companies to fund business operating costs

Answer 29

Business Loans

Question 30

personal purchases

Answer 30

Consumer Loans

Question 31

affected by the length of time the business is operating

Answer 31

Terms

Question 32

Agrees to pay for someone else’s financial obligation if borrower fails

Answer 32

Guarantors

Question 33

Terms of business loans

Answer 33

Shorter + Higher Interest Rates

Question 34

Guarantors required for business loans

Answer 34

Principal Owners themselves are guarantors Need to put up personal assets incase business fails

Question 35

Guarantors required for consumer loans

Answer 35

Does not require guarantors

Question 36

Documents required for Business loans

Answer 36

More documents required

Question 37

Documents required for consumer loans

Answer 37

Requires Proofs of income (pay slip, credit card, etc.)

Question 38

Types of Business loans

Answer 38

- Term loan - credit line - secured business loan - unsecured business loan

Question 39

Lenders provide loan amounts in a lump sum credited to the borrower’s deposit account and can be short-term or long-term. Most term loans are repaid by a fixed amount of payments that include both the principal and the interest.

Answer 39

Term Loan

Question 40

short-term loan providing quick access to money on demand. In This type of loan, borrowers can repay the principal anytime or as often as they can within the loan term.

Answer 40

Credit Line

Question 41

This type of loan requires a collateral that the lender will claim in case the borrower cannot pay the loan. It generally has lower rates, longer loan terms, and higher loan amounts. These features make secured loans affordable and suitable for small startup businesses.

Answer 41

Secured Business Loan

Question 42

This type of loan does not require collateral but is harder to qualify for.No-collateral business loans come with higher interest rates, shorter loan terms, and lower loan amounts.

Answer 42

Unsecured Business Loan

Question 43

Types of Consumer Loans

Answer 43

- Mortgage - Credit Card - Auto Loan - Student loan