Ch. 21 Key Terms

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Ch. 21 - Stocks, Bonds and Mutual Funds
Brooke Young
Flashcards by Brooke Young, updated 9 months ago
Brooke Young
Created by Brooke Young 9 months ago
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Question Answer
Stocks Ownership shares in the company sold to buyers, who receive stock certificates,
Stockholder One who owns stock in a company
Stock certificate Evidence of ownership in a corporation
Common stock Units of ownership called shares
Preferred stock Type of stock that has a preference regarding a corporation’s profits and assets
Dividends Distribution of company’s profit in cash or stock to owners of stock
Cumulative preferred stock Holders of preferred stock must receive current year’s dividends and any dividends in arrears before any dividends are paid out to the holders of common stock
Dividends in arrears Dividends that accumulate when a company fails to pay cumulative dividends to preferred stockholders,
Stockbrokers People who with their representatives do the trading on the floor of the stock exchange
Stock Yield Dividend per share divided by the closing price per share
Earnings per share (EPS) Annual earnings divided by total number of shares outstanding
Round lots Multiple of 100 shares
Odd lots Less than 100 shares
Price-earnings (PE) ratio Closing price per share of stock divided by earnings per share
Bonds Bond selling for more than the face value
Discount Amount bond sells below $1,000
Premium Periodic payments that one makes for various kinds of insurance protection
Bond yield Periodic payments that one makes for various kinds of insurance protection
Mutual Funds Investors buy shares in the fund’s portfolio (group of stocks and/or bonds)
Net asset value (NAV) The dollar value of one mutual fund share; calculated by subtracting current liabilities from current market value of fund’s investments and dividing this by number of shares outstanding
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