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Securities markets
financial marketplaces for stocks and bonds and serve two primary functions: 1.Assist businesses in finding long-term funding to finance capital needs 2.Provide private investors a place to buy and sell securities such as stocks and bonds TERM 2
Primary markets
DEFINITION 2 handle the sale of new securities TERM 3
Initial Public Offering
(IPO)
DEFINITION 3 The first offering of a companys stock TERM 4
Secondary markets
DEFINITION 4 handle the trading of securities between investors with the proceeds of the sale going to the seller TERM 5
Stock
Exchange
DEFINITION 5 An organization whose members can buy and sell securities on behalf of companies and individual investors (NYSE Euronext)
Over-the-Counter (OTC) Market
Provides companies and investors with a means to trade stocks not listed on the national securities exchanges TERM 7
NASDAQ
DEFINITION 7 A telecommunications network that links dealers across the nation so they can exchange securities TERM 8
Securities and Exchange Commission
(SEC)
DEFINITION 8 The federal agency responsible for regulating the various stock exchanges; created in 1934 through the Securities and Exchange Act Requires full disclosure of financials for companies issuing stocks/bonds Prohibits insider trading TERM 9
Prospectus
DEFINITION 9 A detailed registration statement that includes extensive economic and financial information that must be sent to prospective investors TERM 10
Stocks
DEFINITION 10 Shares of ownership in a company
Bulls
Investors who believe stock prices are going to rise TERM 17
Bears
DEFINITION 17 Investors who expect stock prices to decline TERM 18
Capital Gains
DEFINITION 18 The positive difference between the price at which you bought a stock and what you sell it for TERM 19
Stock Splits
DEFINITION 19 An action by a company that gives stockholders two or more shares of additional stock for every share thats outstanding Splits cause no change in the firms ownership structure and no change in the investments value Firms can never be forced to spilt their stocks TERM 20
Dow Jones Industrial Average
DEFINITION 20 The average cost of 30 selected industrial stocks
