3rd Exam
1. FUNDAMENTAL ANALYSIS AND TECHNICAL ANALYSIS - approaches in security analysis.
2. FUNDAMENTAL ANALYSIS - useful in identifying which stocks to buy, sell, or hold.
3. TECHNICAL ANALYSIS - deals with charts and the analysis of volume and price movements.
4. COMPANY ANALYSIS - annual reports published by firms provide financial and non-financial data.
5. OWNERS/MANAGEMENT - owns more than 50% of the voting stocks of another company.
6. OWNERS/MANAGEMENT - who formulates and implements the plans.
7. OWNERS/MANAGEMENT - is important because investors are concerned about the observance of good corporate governance.
8. PRODUCTS/SUBSTITUTES - analyzing prospects of a firm, an analyst consider the products the company offers and the substitutes to its products.
9. TECHNOLOGY - crucial for the success or failure of some industries.
10. PILTEL - first listed Philippine wireless company, its operations were adversely affected because of a technological change.
11. MARKET RISK - includes interest rate risk and currency risk.
12. INTEREST RATE RISK - potential loss in value of an investment.
13. CURRENCY RISK - probability of a loss arising from fluctuations in exchange rate.
14. CREDIT RISK - non-payment by debtors or customers.
15. BUSINESS RISK - variability of core earnings.
16. LIQUIDITY RISK - not being able to sell an asset.
17. OTHER QUALITATIVE FACTORS - company’s background, recent corporate developments, medium to long-term plans of the company, current and future industry trends of products.
18. FINANCIAL STATEMENT - statement of Cash Flows provides information needed to determine the financial health of a company.
19. FINANCIAL RATIO ANALYSIS AND CASH FLOW ANALYSIS - determining the financial health of a company based on financial statements.
20. What are the financial ratios that are classified in five categories?
1) Profitability ratios,
2) Liquidity ratios,
3) Leverage ratios,
4) Efficiency or asset management ratios
5) Valuation ratios
21. PREFERRED STOCK: Hybrid Security - similar to bonds with fixed dividend amount,similar to common stock as dividends are notrequired and have no fixed maturity date.
22. PAR VALUE - nominal or face value of a stock or bond.
23. CUMULATIVE EARNINGS - any preferred dividends not paid in previous periods.
24. MATURITY - no specific maturity date.
25. PRIORITY TO ASSETS AND EARNINGS - dividends must be paid on preferred stock.
26. CONTROL OF THE FIRM (VOTING RIGHTS) - almost all preferred stock is non-voting stock.
27. CONVERTIBILITY - most preferred stock may be converted to common stock.
28. CALL PROVISION - gives the issuing corporation the right to call.
29. SINKING FUND - call for the repurchase and retirement of a given percentage.
30. PARTICIPATING - participates with the common stock in sharing the firm’s earnings.
31. PAR VALUE - represents a stockholder’s minimum financial obligation.
32. DIVIDENDS - firm has no legal obligation to pay common stock dividends.
33. CLASSIFIED STOCK - common stock that is given a special designation,such as Class A, Class B, etc., to meet special-needs of the company.
34. FOUNDER’S SHARE - class of stock owned by the firm’s founder.
35. AMERICAN DEPOSITORY RECEIPTS - certificates created by banks that represent ownership in stocks of foreign countries.
36. FOREIGN EQUITY - Yankee stock & Euro stock.
37. VALUING STOCKS WITH CONSTANT, OR NORMAL, GROWTH - growth that is expected to continue into the foreseeable future at about the same rate as that of the economy as a whole.
38. EFFICIENT THEORY - abnormal price movements are random.
39. CHART TYPES - arithmetic or logarithmic scale.
40. LINE CHARTS - most basic form of charts, a popular type of chart and doesn’t provide much insight into intraday price movements.
41. BAR CHART - basic tools of technical analysis, enable traders to discover patterns more easily.
42. BAR CHART - series of vertical lines that indicate the price range.
43. CANDLESTICK CHART - represents prices looks like a candlestick, with a thick ‘body’ and usually, a line extending above and below it, called the upper shadow and lower shadow, respectively.
44. RENKO CHART - noise-less charting technique, consists of white/green and black/red bricks.
45. HEIKIN ASHI - trading chart that originated in Japan, similar to candlestick charts.
46. What is the main difference between candlestick and Heikin Ashi charts?
- Heikin Ashi charts average price moves, creating a better appearance.
47. POINT AND FIGURE CHARTS - is not very well known or used by the average investor, but they have a long history of use dating back to the first technical traders. These simple charts only focus on price moves, while filtering out ‘noise’.
48. GLOBE TELECOM IN TECHNOLOGY - introduced the GSM technology