Personal Finance Chap 9 Vocab
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40 terms
Terms | Definitions |
|---|---|
 common stock | stock that provides the most basic form of corporate ownership, and it entitles you to voting privileges. |
| preferred stock | stock that gives the owner the advantage of receiving cash dividends before common stockholders receive any. |
| corporate bond | a corporation's written pledge to repay a specified amount of money along with interest. |
| government bond | the written pledge of a government or a municipality to repay a specified sum of money with interest. |
| mutual fund | an investment alternative in which investors pool their money to buy stocks, bonds, and other securities based on the selections of professional managers who work for an investment company. |
| Real estate | an investment in property or land with an expectation that the property will increase in value so you can sell it at a profit or receive rental income. |
| odd lot | An odd lotter is an investor who purchases shares or other securities in small or unusual quantities. Stocks are typically traded in increments of 100 shares, a quantity known as a round lot or board lot. |
| round lot | 100-share increments of stock |
| stop order | an order to a broker to sell (buy) when the price of a security falls (rises) to a designated level |
| limit order | the exact price you are willing to accept per share. |
| market order | an order to a broker to sell or buy stocks or commodities at the prevailing market price |
| Commission | An amount of money, typically a set percentage of the value involved, paid to an agent in a commercial transaction |
| Portfolio | A range of investments held by a person or organization |
| over-the-counter (OTC) Market | a network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange. |
| account executive | or stockbrokers, are licensed individuals who buy or sell securities for clients. |
| secondary market | a market for existing financial securities that are currently traded among investors. |
| initial public offering (IPO) | when a company (called the issuer) issues common stock or shares to the public for the first time. |
| primary market | a market in which an investor purchases securities from a corporation through an investment bank or some other representative of the corporation. |
| bull market | occurs when investors are optimistic about the economy and buy stocks. Because of the greater demand for stock, the value of many stocks and the value of the stock market as a whole increases. |
| bear market | occurs when investors are pessimistic about the economy and sell stocks. As a result of this decline in demand, the value of individual stocks and the stock market as a whole decreases. |
| current yield | in reference to bonds and other fixed-interest securities such as gilts |
| total return | takes into account not only the capital appreciation on the portfolio, but also the income received on the portfolio. |
| earnings per share | the portion of a company's profit allocated to each outstanding share of common stock |
| price-earnings (PE) Ratio | one of the most commonly used measures of value in financial circles. It expresses the value in terms of a multiple of profits. |
| penny stock | sell from less than $1 to $10 a share. |
| small cap stock | issued by a company with a capitalization of $500 million or less. |
| Capitalization | convert into capital. |
| large cap stock | issued by a company with a large amount of capitalization. |
| defensive stock | remain stable during declines in the economy. |
| cyclical stock | have a market value that tends to reflect the state of the economy. |
| growth stock | issued by a corporation whose potential earnings may be higher than average. |
| income stock | pay higher-than-average dividends compared to other stock issues. |
| blue-chip stock | a safe investment that generally attracts conservative investors. |
| par value | The nominal value of a bond, share of stock, or a coupon as indicated in writing on the document or specified by charter |
| stock split | to cut the price of the stock in half |
| preemptive right | the right granting to shareholders the first opportunity to buy a new issue of stock; provides protection against dilution of the shareholder's ownership interest |
| public corporation | A public company or publicly traded company is a company that has permission to offer its registered securities |
| proxy | a figure that can be used to represent the value of something in a calculation |
| private corporation | a corporation owned by a few people; shares have no public market |
| Securities | a certificate attesting credit, the ownership of stocks or bonds, or the right to ownership connected with tradable derivatives. |
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