Chapter 11

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Owners of _______ _____ help elect the board of directors

common sotck

Growth stocks can be profitable because they

reinvest earnings

Return is closely linked to __________ and ___________________.

risk; liquidity

Congress passed the _______ ________________ to make sure that corporate financial reports are accurate.

sarbanes oxley act

The financial system allows the transfer of money between ________ and ___________.

savers; borrowers

Investors experience capital gains when they

sell a stock at a higher price then what they bought it at

Investors suffer capital losses when they

sell a stock for less than what they paid or

a unit of stock in a company

share

making high-risk investments with borrowed oney

speculation

Investors buy stocks trhough ____________________.

stock brokers

____________ ___________ are markets where stocks are bought and sold.

stock exchanges

During a bear market, investors sell bcause

they expect the prices to decrease.

Fedwire

wire transfers electronic payments, security transfer services

small cap

<2B

large cap

>10 B

Financial intermediaries also provide information and give investors more _____________.

liquidity

NYSE Requirements

2,000 shareholders, 1.1 million shares, $60 million in market cap, $2.5 million in latest fiscal year

mid cap

2B-10B

The collapse of the stock market of 1929 was one of the causes of the ___________ ___________

Great Depression

What does ROI stand for?

Return On Investment

SEC

Securities & Exchange Commision

SIPC

Securities Investor Protection Corporation

In a _________ _________, most stock prices are falling

bear market

In a _____ _____ most stock prices are rising.

bull market

Fedcash

distributes currency

Income stocks pay

dividends at regular times during the year

Stock are riskier because

dividends depend on profit

Investors in stock can profit from ___________ or ______________.

dividends; capital gains

Financial intermediaries include banks, savings and loan associations, credit unions, lief insurance companies, _________ ________________, and _____________ ________________.

finance companies; pension funds

An investment is something bought for ________ financial benefit.

future

Investment promotes economic __________.

growth

Financial intermediaries allow investors to cut down risk through diversification and by buying ___________________ _____________.

mutual funds

Blue chip stocks are traded on the

new york stock exchange

contract to trade stock at a specific price and time in the future

options

Owners of ________ ____________ do not vote but receive dividends first

preferred stock

PE

price-to-earnings

A stock's price usually goes up if the company makes a _____________.

profit


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