Personal Finance Ch. 17 Investing in Stocks

Stockholders profit through dividends and capital gains.

A _________ is any physical asset that appreciates in value over time bc it is rare or desired by many.

_________ is buildings and land and used as an investment.

An increase in the number of outstanding shares of a company's stock

Return on investment (ROI) is used to evaluate the efficiency of an investment.

Money paid to stockholders from a coporation's earnings

Types of investment risk include interest-rate risk, political risk, market and nonmarket risk, &company &industry risk.

Emerging stocks are issued by young, often small, companies and have a higher overall risk.

An exchange where stock is sold to the highest bidder and bought from the lowest offeror

As your investment grows beyond current needs, you can progress through investment stages with greater amounts of risk.

Par value is used to calculate __________ payments for preferred stock.

The more risk you are willing to take, the less you stand to gain or lose from an investment.

You can make money on stocks from dividends and from an increase in the price of the stock.

Defensive stocks remain relatively stable during both good and bad economic times.

Because preferred stock pays a fixed dividend, it is more risky than common stock.

A stockholder's written authorization to transfer his or her voting rights to someone else

The use of dividends previously earned on stock to buy more shares

Stocks of large, well-established corporations with a solid record of profitability

Cyclical stocks do poorly when the economy is growing but do well during recessions.

Full service brokers give u advice in buying & selling securities while discount brokers don't give advice & are cheaper

______ stocks are low priced stocks of small companies that have no track record.

A corporation's after-tax earnings divided by the number of common stock shares outstanding is ______________.

A marketplace where brokers who are representing investors meet to buy and sell securities

The right but not obligation to buy/sell stock or a commodity 4a specified price w/in a specified period.

Cyclical stocks are affected by ups and downs in the economy.

Blue chip stocks provide a relatively safe but low return.

Stocks in corporations that have a consistent history of paying high dividends

Corporations that issue income stocks pay profits to stockholders in the form of dividends.

__________ is a benchmark that investors use to judge the pferformance of their investments.

Futures, options, penny stocks, &collectibles carry a __ risk of loss but also offer large gains if they are successful.

The par value printed on the stock certificate has nothing 2do w/ the market value that investors actually pay4the stock

The price for which stock is bought and sold in the marketplace

Medium-risk/medium-return investments include stocks, mutual funds, annuities, and real estate.

A type of stock that pays a fixed dividend but has no voting rights

The use of borrowed money to buy securities

Defensive stocks (noncyclical) are affected by the ups and downs of business cycles.

Buying stock directly from a corporation

Investing helps you beat ________ when your investments give you a return that is higher than the ________ rate.

Earning money on the increase in the price of a stock in called ______________.

A company whose stock is traded openly on stock markets

Selling borrowed stock that must be replaced at a later time

Contract where you make a lump-sum payment or series of payments that earn interest in return for reg. disbursements

Preferred stock earns a lower return when the company does well than common stock.

Corporations that issue growth stocks reinvest profit in the business so that it can grow.

A prolonged period of rising stock prices and a general feeling of investor optimism

Dividends and caplital gains are used to determine a stock's ROI.