| Term | Definition |
|---|
| Common stock | is more risky, has a fluctuating dividend, and has voting rights. |
| Bear Market | A condition of the stock market in which prices of stocks are generally on a decline |
| Board of Directors | Chosen by the stockholders, they make the policies and goals of the company. |
| Diversification | Spreading out your investment |
| Liquidity | Converting assets into cash |
| Bond | A loan made to a business, it does not signify ownership. |
| Coupon | The component of a bond that states the interest rate. |
| Dow Jones | The top thirty stocks whose gain or loss for the day are totaled for each trading day. |
| Liability | All financial debt that is your responsibility. |
| Big Board | Nickname for the New York Stock Exchange |
| Bull Market | Period of increasing stock prices |
| Capital gain | Selling your investment for more than you bought it for |
| Dividend | A share of the company's profit paid to the holders of the stock |
| Stock certificate | Proves you own the stock |
| Stock broker | A licensed professional who handles stock purchases and sales |
| Tickertape | An instant record of stock sales for the stock exchange. |
| Speculating/Speculator | Buying and selling stocks as a way to earn a fast profit. They make high risk investments with borrowed money. They buy on margin |
| Prospectus | Gives the history and background of the company-including management and the company's ability to pay back their debts. |
| Takeover | One investor group buys enough stock in a corporation to gain control of the other corporation |
| Trading specialist | Brings the buyer and the seller together. Each booth has one. They keep track of the current bid/asking price. |
| Yield | Dividing the annual dividend by the current price of the stock |
| Secondary Market | When the public buys and later sells shares of stock |
| Preferred Stock | Has no voting rights, a fixed dividend, is less risky, is more expensive and gets paid first. |
| Par Value | The amount of money you originally loaned to the company |
| Maturity Date | When the bond is redeemable. |
| IPO | The first time to stock is offered to the public (initial public offereing) |
| Blue Chip stocks | Best performing stocks, fortune 500 companies, typically very conservative, traded on the NYSE |
| Bid | The highest price a buyer is willing to pay for a stock |
| Stock Split | Division of a single share of stock into more than one share, the price is also split in half. It is used when companies want to encourage investors. |
| Brokerage Houses | Employ market analysts to research firms to find strengths and weaknesses of businesses looking for financial investors. |
| Trading Booth | Horseshoed shaped counters-responsible for trading about 100 companies. |
| Floor Brokers | They actually make the buy/sell for you and me. |
| NASDAQ | 2nd largest exchange. Most securities traded are industrial and technology. Do their trading over phone and on computer only. |
| Portfolio | A collection of all of your investments (securities)-shows total assets. |
| Change | The difference between a stock's closing price that day and its closing price the day before. |
| P/E ratio | The closing price divided by the company's earnings per share. |
| Securities | Stocks and bonds |
| S&P500 | Index that showa the performance of a limited number of stocks. |
| Mutual fund | Pooling your money with other investors and allowing a company with trained specialists to invest your money. It's a good way to diversify your investment |
| Asset | Items of ownership that can be converted into cash. |
| Securities and Exchange market | Regulatory Agency that oversees the financial markets including the stock markets. |
| Moodys | Rate bonds. This allows investors to determine which bonds are a lower risk. |
| Treasury Bond | Long term investment (maturity-10-20 yrs) |
| Treasury Note | Intermediate term investment (maturity-2-10 yrs) |
| Treasury Bill | Short term (maturity 3,6, 12 months). Seen as a shelter when the stock market is doing poorly. |
| Publicly held corporations | Sell their stock to a financial institution for starting capital and then that financial institution sells it to the public. |
| Quarter | Every three months. |
Combine with other sets
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