Chapter 8- The Stock Martket
1. NYSE: most well-known & reputable stock market in America. 2. NASDAQ: "over-the-counter" trading; no physical location. 3. AMEX: less known; reputable American market.
3 stock exchanges and the differences.
Companys profits
A dividend payment is based on the
Bear Market
A falling stock market in which investors are selling stocks
Mutual Fund
A group of stocks purchased by individuals and managed by a professional
Bull Market
A rising stocm market in which investors are buying stocks
Portfolio
A set of investment assets owned by am individual
Preferred Stock
A type of stock that is not a true ownership of a corporation
Speculation
Actively buying and selling stocks for the purpose of profiting from short-term changes in their prices is called
Obtain additional financial capital
Businesses sell stock to the public primarily to what
People bought stocks thinking that they were going to go up and make money but really it went down and they lost money.
Describe the circumstances leading up to the crash of 1929.
Speculative Bubble
Excessive rising stock prices due to expected rises in prices
1. Raise needed revenue 2. Provides opportunities for individuals to invest. 3. Provides information to corporate leaders and governmental policies.
Explain three benefits of the stock market to the overall economy.
1. To get a dividend. 2. To get a profit by selling stocks.
Individuals purchase stocks mainly for two reasons.
1. DJIA 2. S &P 500
List two well-known stock indices.
Stock
Portion of a Corporation
30 major US producers of goods and services
The DJIA is an index of
-Great Britain in the 1700's. -Well organized stock in European countries.
The circumstances surrounding the origin of stock exchanges.
NYSE Composite Index
The index that includes all the stocks on the NYSE is the
Common stock
The most prevalent type of stock
The NYSE
The most respected stock exchange in the world is
Investment Bank
The organization that helps a business issue stock to the public for the first time
The company's profitability
The price of a stock tends to reflect information and expectations about
1. Common stock 2. Preferred stock
Two types of stocks
Initial Public Offering
What does the abbreviation IPO stand for
The Securities and Exchange Commission. & Its principal function is to supervise the Securities industry
What does the abbreviation SEC stand for? What is the SEC's is primary function?
A physical location where trading takes place
What does the over-the-counter trading lack that the other stock exchanges have
Stockbroker & commission
What is a person called who works for an investment firm and specializes in buying and selling of stocks? What does he receive that can be either a flat rate or a percentage of the value of the stock trade?
A stock index
What term describes a group of stocks that are listed together with their prices combined and reported together
The DJIA
Which is the most well-known stock index
The NASDAQ
Which stock exchange is entirely electronic with no face-to-face trading
