Investment Test Terms

Terms in this set (22)

the lowest price an investor will accept to sell a stock. Practically speaking, this is the quoted offer at which an investor can buy shares of stock; also called the offer price.

Any market in which prices exhibit a declining trend. For a prolonged period, usually falling by 20% or more

The price a potential buyer is willing to pay for a security.

Upward trend in the market.

Stock shares that let an investor vote on matters such as the election of directors. It also allows for dividend payments or capital appreciation of the security.

Stock that tends to rise quickly when the economy turns down like housing, automobiles and paper.

Discount Broker

A brokerage house featuring relatively low commission rates in comparison to a full service broker.

Diversification

Dividing investments among a variety of securities with different risks and rewards.

Full Service Broker

A broker who provides clients an all inclusive selection of services such as advice on security selection and financial planning.

Stock in a young company that has the potential for high returns but also a potential for failure

Large Cap Stock

A term used by the investment community to refer to companies with a market capitalization value of more than $10 billion. Large cap is an abbreviation of the term "large market capitalization".

National Association of Securities Dealers Automatic Quotation System - An electronic quotation system that provides price quotations to market participants about the more actively traded common stock issues in the OTC market. There are over 4000 common stocks listed on the NASDAQ

A collection of investments.

Preferred Stock

A stock that gives the holder a claim, prior to common stockholders on earnings and also generally assets in the event of liquidation. Most preferred stock pays a fixed dividend that is paid prior to the common stock dividend, stated as in a dollar amount of as a percentage of par value. No voting rights though.

Ownership in a company indicated by shares , which represents a piec of the corporation's assets and earnings.

A stock symbol or ticker symbol is an abbreviation used to uniquely identify publicly traded shares of a particular stock on a particular stock market. A stock symbol may consist of letters, numbers or a combination of both.

Stocks with low/price/book ratios or price /earning ratios. Usually have higher average returns that growth stocks.

Small Cap Stock

Stock issued by a company with a market capitalization of between $300 million and $2 billion.

Full Service Broker

A broker who provides clients an all inclusive selection of services such as advice on security selection and financial planning.

Stock in a young company that has the potential for high returns but also a potential for failure

Passive Income Income that comes from sources other than a job you work at

Goal of passive income passive income should exceed expenses to achieve financial independence

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