Chapter 21

Question	Answer
Stocks	Ownership shares in the company sold to buyers, who receive stock certificates, 550.
Stockholder	One who owns stock in a company, 426, 550.
Stock certificate	Evidence of ownership in a corporation, 550.
Common stock	Units of ownership called shares, 428, 550, 551.
Preferred stock	Type of stock that has a preference regarding a corporation’s profits and assets, 550, 551.
Dividends	Distribution of company’s profit in cash or stock to owners of stock, 550.
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, 550, 551.
Dividends in arrears	Dividends that accumulate when a company fails to pay cumulative dividends to preferred stockholders, 550.
Stockbrokers	People who with their representatives do the trading on the floor of the stock exchange, 550, 552.
Stock yield	Dividend per share divided by the closing price per share, 550.
Earnings per share (EPS)	Annual earnings divided by total number of shares outstanding, 551.
Price-earnings (PE) ratio	Closing price per share of stock divided by earnings per share, 551.
Price-earnings (PE) ratio	Closing price per share of stock divided by earnings per share, 551.
Bonds	Bond selling for more than the face value, 553.
Discount	Amount bond sells below $1,000, 553.
Premium	Periodic payments that one makes for various kinds of insurance protection, 522, 533.
Bond yield	Total annual interest divided by total cost, 554.
Mutual fund	Investors buy shares in the fund’s portfolio (group of stocks and/or bonds), 555.
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, 555.

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	Created by McKenzie Layton about 2 years ago