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FBLA Securities and Investments

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Common stock

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Terms in this set (125)

the most "junior security" because it ranks last in line at liquidation. An equity or ownership position that usually allows the owner to vote on major corporate issues such as stock splits, mergers, acquisitions, authorizing more shares, etc.

issues and redeems certificates. Handles name changes, validates mutilated certificates. Distributes dividends, gains, and and shareholder reports to mutual fund investors.

audits the transfer agent to make sure the number of authorized shares is never exceeded

money paid from profits to holders of common and preferred stock whenever the Board of Directors is feeling especially generous

Declaration date

the date the Board of Directors declares a dividend

the date determined by the Board of Directors upon which the investor must be the "holder of record" in order to receive the upcoming dividend. Settlement of a trade must occur by the record date for the buyer to receive the dividend

the date that the dividend check is paid to investors

regular way settlement

T + 3, trade plus three business days. T + 1 for Treasury securities

regular way settlement, trade date plus three business days

two days before the Record Date of corporate stock. The date upon which the buyer is not entitled to the upcoming dividend. Note that for mutual funds, this date is established by the Board of Directors, usually the day after the Record Date

Pre-emptive right

the right of common stockholders to maintain their proportional ownership if the company offers more shares of stock

subscription right

the securities used in additional offerings of stock to purchase available shares, usually at a slight discount

long term equity securities giving the owner the right to purchase stock at a set price. OFten attached as a "sweetener" that makes the other security more attractive

currency exchange risk

the risk that the value of the U.S. dollar versus another currency will have a negative impact on businesses and investors.

a derivative giving the holder the right to buy or sell something for a stated price up to expiration of the contract. Puts and calls