Interdisciplinary First Glossary Quiz

Analyst

Someone who tracks the performance of stocks, bonds, and other types of investments

Ask

Lowest price which someone offers to sell stock

Asset

Something you own, bought to benefit the firm's operations, and used to generate revenue

Bear

General negative downtrend to financial markets

Bid

Highest price which someone offers to buy a stock

Bond

Contract between a borrower and a lender

Bull

General positive uptrend to financial markets

Buy to close

Terminating position as owner

Buy to open

Initiating position as owner

Capital gain

Selling an asset for more than one paid for it

Close

To end a position in financial security

Diversification

Reducing risk by spreading your investments across multiple securities and investment types

EPS (Earnings per share)

Profit or loss per common share

Equity/Capital/Net worth

Represents the owner's claim on value of firm's assets

Expense

A businesses costs to generate revenues

Inflation

Rate at which general prices slowly increase

Interest rates

Represents the price of money

Last

Last price a security was transacted for

Liability

A company's legal debts or obligations

Liquidity

Ease with which an asset can be easily sold or bought within a market

Mean

An average

Midpoint

Between the bid and the ask of a financial security

Momentum

Rate at which a financial security is increasing or decrease in price over time

Moving Average - simple

Continuously changing mean

Net Income (loss)

Company's total earnings(losses) minus relevant costs of doing business(supplies,marketing, labour, etc)

Open

Initiating a position in financial security

P/E ratio

Market price per share divided by annual earnings per share

Portfolio

Individual investor's collection of financial investments

Position

Ownership quantity and direction in financial security

Range

Difference between the highest and lowest value in a data set

Resistance

Price level that a financial security has a difficult time rising through

Return

How much an investment earns based upon some starting value in the past

Revenue

Total gross amount of money that a business makes

Risk Mitigation

Process of developing strategies to reduce threats

Risk Tolerance

Amount of volatility and risk of loss one is able to stomach when investing

RRSP

A Registered Retirement Savings Plan

Sector/Industry

Group of companies that operate in same segment of share similar business type

Sell to close

Terminating a position in which you are not an owner

Sell to open

Initiating a position in which you are not the owner

Stock Market

Business establishment responsible for facilitating the trading or exchange

Stock/Share

A portion of ownership of a corporation

Support

Price which, in the past, the security has had a hard time falling below

Technical Analysis

Method of evaluating securities by analyzing statistics generated by market activity

TFSA

Tax Free Savings Account

Trend (key signs of)

General direction of a market or the price of financial security

Asset Allocation

Process of apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon

Beta

Measure of stock's risk in relation to the overall market

Bollinger Bands

Pair of lines encapsulating what should be 95% of all price action

Bottomed

Lowest point of a company's stock price

Commercial Paper

Unsecured, short-term debt instrument issued by a corporation

Commodity

Raw material that is bought and sold, usually in large quantities

Compounding

Generating earnings from previous earnings

Consolidation

An investment spends a period of time without a distinct trend

Convergence/Divergence

A leading indicator (advance warning) signal that can be found in several types of momentum studies

Crossover (any kind)

Occurs when a change in the short-term trend persists to affect a longer term trend

Discounting

Process of calculating the equivalent of a future value of money

Dividend

Per share payment to shareholders out of the company's past profits

Economic Cycle

Natural fluctuation of the economy between periods of expansion (growth) and contraction (recession)

Guidance

Company officially comes out with their earnings per share

Leverage

Use of capital for an investment in excess of the investor's own resources

Limit order

Type of transaction to buy or sell an investment

Long

Position in a stock or financial security believing that it will rise in value

Margin

Various revenue totals minus types of cost

Marginal tax rate

Amount of tax paid on an additional dollar of income

Market Capitalization

Value of a company that is traded on the stock market

Price target

Analyst's prediction for the price of financial security in future

Priced in

Current value of financial security reflects impact of future event or expectation

Short (Sell short, shorting)

Selling a share with the expectation that you will be able to purchase it back

Short Covering (to Cover)

Purchasing of shares to cover previous shorts

Standard Deviation

How much you can expect a randomly selected data point to differ from the mean of the data set

Stock Index

Statistic designed to track the value of a group of stocks

Underlying

Security from which a derivative gets its value

Upgrade/downgrade

Financial analysts change their recommendation to clients about whether to buy, sell, or hold

Valuation

How expensive a security is in relative terms

VIX

Index used by experienced investors to gauge volatility and risk in the stock market

Volatility

Measure of the degree of fluctuation of a security's value

Volume

Amount of shares that trade hands from sellers to buyers as a measure of activity

Weighted Average

A mean where each data point is not given equal value in the data set