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stock index
made up of selection of stocks
chosen based on market cap
exp: sn p 500 do jones
stock split
when company increases number of outstanding shares by issuing more shares to existing shareholders
overall company value and invester holding dont change
ratios of a stock split
2 for 1 and 3 fo1
market valuated index
capitilization weighted index
price weighted index
index based on price not market cap
efficient market
weak form
semi strong
strong
weak form efficiency
stock prices reflect past trading information
technical analasis is inifective
semi strong form efficiency
stock prices reflect all publickly avalable info
strong form efficiency
stock prices include all informaton
risk and return
higher risk likly a higher return
technical analasis
method of evaluating securaties and trading decsions
price charts and patterns
fundemental analasis
earnings and economic conditions
price movements
dupply and demand
investors analize movement using fundemental and technical analysis
anuity
provides series of payments over time
offered by insurance companys
mostly for retirement income
bonds
fixed income investment
investor lends money to bond holder in exchange for periodic interest payments
government bond
issued by government
exp us treasury bond
corprate bonds
issued by a company
municipal bonds
issued by a state or local government often tax free
realestate investment
purchasing owning renting or selling property
location location location
divident re investment palan (drip)
allows investors to automaticaly re invest there cash dividends into aditional shared of the same company
par value of a bond
face value
coupon rate of a bond
fixed variable intrest rate
maturity date
date when bond issuer must pay back bond holder
yeild
return a investor makes on a bond
long purchace
when investor buys asset with expectation that price will increase over time
short sale
1⃣ Borrow Shares – You borrow stock from a broker.
2⃣ Sell the Shares – You sell the borrowed stock at the current market price.
3⃣ Wait for the Price to Drop – If the stock price falls, you can buy it back at a cheaper price.
4⃣ Buy Back and Return – You purchase the shares at the lower price and return them to the broker.
5⃣ Keep the Profit – Your profit is the difference between the selling price and the repurchase price (minus fees).
marginal trading
allows investor to borrow money from a broker to buy securaties increasing there buying power
annomolies
price behavior and pattern of market
financial statment
income statement
balance sheet
cash flow statement
