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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.


Spreading out your investment


Converting assets into cash


A loan made to a business, it does not signify ownership.


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.


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


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


An instant record of stock sales for the stock exchange.


Buying and selling stocks as a way to earn a fast profit. They make high risk investments with borrowed money. They buy on margin


Gives the history and background of the company-including management and the company's ability to pay back their debts.


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.


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.


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


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.


2nd largest exchange. Most securities traded are industrial and technology. Do their trading over phone and on computer only.


A collection of all of your investments (securities)-shows total assets.


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.


Stocks and bonds


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


Items of ownership that can be converted into cash.

Securities and Exchange market

Regulatory Agency that oversees the financial markets including the stock markets.


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.


Every three months.

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