Key Terms Chapter 21: Stocks

Question	Answer
Bond yield	Total annual interest divided by total cost.
Bonds	Bond selling for more than the face value.
Common stock	Units of ownership called shares.
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.
Discount	Amount bond sells below $1,000.
Dividends	Distribution of company’s profit in cash or stock to owners of stock.
Dividends in arrears	Dividends that accumulate when a company fails to pay cumulative dividends to preferred stockholders.
Earnings per share (EPS)	Annual earnings divided by total number of shares outstanding.
Mutual fund	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.
Odd lots	Less than 100 shares.
PE ratio	Closing price per share of stock divided by earnings per share.
Preferred stock	Type of stock that has a preference regarding a corporation’s profits and assets.
Premium	Periodic payments that one makes for various kinds of insurance protection.
Price-earnings (PE) ratio	Closing price per share of stock divided by earnings per share.
Round lots	Multiple of 100 shares.
Stock certificate	Evidence of ownership in a corporation.
Stock yield	Dividend per share divided by the closing price per share.
Stockbrokers	People who with their representatives do the trading on the floor of the stock exchange.
Stockholder	One who owns stock in a company.
Stocks	Ownership shares in the company sold to buyers, who receive stock certificates.

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Key Terms Chapter 21: Stocks

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	Created by JOHNA THARP 10 months ago