Econ CH 8

fee paid for a stockbroker's services

Commission

a distribution of a portion of a companies profits

Dividend

How does the stock market help analysts and policymakers?

Gives them information on how the health of the economy is and helps them see trends

What is the term for a corporations first sale?

IPO

What is an IPO?

IPO is an initial public offering is a corporations first sale of stock

no actual place

NASDAQ

spending on services is popular in US consumer spending which would indicate that health?

S & P 500

Which is the best health indicator of american industry?

The Dow

What is a stock exchange?

Aa stock exchange is a place where people come to buy and trade stocks, NYSE

What is a stock index? Explain the purpose

a group of important stocks from a particular industry that helps analysts see specific trends in specific industries

Stockholders can be called to vote on

all of the above

What is speculation? What phenomenon results?

buying/selling stock for the purpose of taking advantage of short term price changes to make money and a speculative bubble forms and then bursts due to the value of the company being exceeded

if a corporation files under bankruptcy who would last receive money?

common stockholder

SEC form after what

great depression

privately managed stock portfolio

mutual fund

a collection of stocks form diff individual corporations

portfolio

Name 2 ways in which stock markets are important today:

provide a way for investors and corporations to raise revenue and also provide information to analysts on the health of the economy

crash of 1929 was caused by what

speculative bubble

a person specialized buying/selling stocks

stockbroker

portions of ownership in a corporation

stocks

Why would a company sell less than half their stock?

to keep majority ownership & decision making control

What are two primary reasons people buy stock?

to make profit & receive a dividend