Year 10 Financial Literacy - Share Market Task

Vocabulary flashcards covering key terms and concepts from the Year 10 Financial Literacy Share Market Task, including shares, markets, investment strategies, and market indices.

Share

A unit of ownership in a company; owning shares makes you a shareholder with rights such as attending AGMs, receiving reports, and dividends.

Equity Capital

Funds raised by a company through issuing shares in exchange for ownership; the money is not repaid.

IPO (Initial Public Offering)

The process by which a company offers its shares to the public in the primary market to raise capital.

Prospectus

A document outlining who is involved, what is on offer, when it will occur, why funds are being raised, and how to participate.

Primary Market

Market where new shares are issued to raise capital (includes IPOs and other public offerings).

Secondary Market

Market for buying and selling existing listed shares among investors; trading occurs daily (e.g., on the ASX).

ASX

Australian Securities Exchange; the main exchange where Australian shares are listed and traded.

Stockbroker

A professional who executes buy/sell orders for clients; can offer full advisory services or non-advisory (lower fees).

At Market Order

An order to buy or sell shares at the current market price.

At Limit Order

An order specifying the maximum price to pay or minimum price to sell.

Conditional Orders

Orders that activate when a specified price or condition is reached (has a trigger).

ROI (Return on Investment)

A measure of investment performance: (Gain from Investment − Cost of Investment) / Cost of Investment.

T+3

Settlement rule: trade date plus 3 days; the time frame for the transfer of money and ownership.

Delisting

When a company ceases trading and its shares are removed from the ASX.

Diversification

Spreading investments across different assets/sectors to reduce overall risk.

Asset Classes

Broad categories of investments: Cash, Fixed Interest, Property, and Shares/Equities.

Cash

Very secure, highly liquid investments with typically lower returns.

Fixed Interest

Investments like term deposits and bonds that provide steady income and lower growth potential.

Property

Investments in real estate, including residential, commercial, or industrial properties.

Shares/Equities

Ownership in companies; potential for capital growth and dividend income.

Defensive Shares

Shares that tend to hold their value during economic downturns.

Cyclical Shares

Shares whose prices move with the economic cycle and tend to rise with growth.

Growth Shares

Shares with high growth potential; may not pay dividends as profits are reinvested.

Income Shares

Shares that pay larger, regular dividends to provide steady income.

Blue Chip Shares

Large, established companies with stable dividends and reliable growth.

Capital Growth

Increase in the value of an investment over time due to rising share prices.

Dividend

Distribution of a company’s profits to shareholders; in Australia, may come with franking credits.

Franking Credits

Tax credits attached to Australian dividends, reducing tax on distributed profits.

Inherent Value

Intrinsic value of a share based on future earnings potential and dividends.

Index

A measure showing the price change of a basket of shares to gauge market performance.

All Ordinaries Index (All Ord’s)

An index measuring overall Australian share market performance, weighted by market cap and excluding dividends.

S&P/ASX 200

The ASX index tracking the 200 largest companies by market cap; main Australian market index, covering about 80% of ASX value.

Dow Jones Industrial Average (DJIA)

A key international index tracking major US-listed companies; commonly used as a global benchmark.

Supply and Demand

Market price is determined by the level of demand to buy versus supply to sell.

Price-Sensitive Information

Announcments marked with a red exclamation that can pause trading to allow investors to respond.

Brokerage

Fees charged by brokers for executing trades; can vary between advisory and non-advisory services.

Liquidity

How easily an asset can be bought or sold without affecting its price; shares typically settle in 3 days (T+3).