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*Glossary
 
sing the Stock Market Glossary, you must find 10 word to define.  You must put the definition in you own words and in complete sentences.  You may not simply copy and paste the definitions.  Type your answers in a word processor. 
 
Stock Market Glossary
 
American Stock Exchange (AME) 
The American Stock Exchange (see: stock exchange) is the second largest U.S. stock exchange. It is based in New York city and sometimes called "the curb".  Bud says: "Click on American Stock Exchange and visit." 
Appreciate 
An increase in any investment's value. For example, if shares of stock in a company you own have risen from five dollars to ten dollars, it has "appreciated." 
Bear Market 
Term describing a long-run, downward-moving securities market. 
Blue-Chip Stock 
Large, financially strong corporations with little investment risk, and good records of earnings and dividend payments. Traditionally the stock shares of these corporations trade on the New York Stock Exchange or other major exchanges and generally trade at a price of $50.00 and above. 
Bond 
A bond is a debt instrument issued by an entity for the purpose of raising capital. A bond might be issued by a corporation or other entities such as state or municipal governments. Bonds normally have a set maturity (term) and interest (coupon) rate associated with them. 
Bottom line 
The last line of a company's profit and loss ledger sheet. The bottom line usually refers to the net profit or loss of a company at any given time. 
Broker 
An agent who handles the public's orders to buy and sell stocks, commodities or other property. Full service brokers are those that provide a wide range of investment services, research and advice. A full service account representative usually works on a commission basis, thereby generating income on the number of their clients' trades. Discount brokers are not in the business of giving investment advice. They usually work on salary, limit their services to trade executions and collect substantially lower fees. Example: E*Trade Securities 
Bull market 
Term describing a long-run, upward-moving securities market. 
Commission 
A fee charged by a broker for their service in facilitating an investment transaction. 
Common stock 
Equity, or ownership, in a corporation. Stockholders participate in a company's profits or losses through dividends and changes in the stock's "market value." 
Corporation 
A business organization that, for tax purposes, is a legal entity. A corporation has limited liability (owners can lose only what they invest), easy transfer of stock, and continuity of existence. 
Dividend 
Payment made to the owners of common or preferred stock shares in a corporation. Cash dividends are paid out of corporate earnings and the percentage of earnings paid out varies from corporation to corporation. Generally, the percentage of corporate earnings paid out runs from 40 to 80 percent, but many times is zero, where the corporation keeps its entire earnings. A stock dividend pays the shareholders additional shares of stock or a fraction thereof, rather than cash. It is not mandatory for a company to distribute dividends. 
Dow Jones Industrial Average (DJIA) 
A stock index (one of many) commonly used as an indicator of changes in the general level of the stock market or stock prices in the United States. In this index, there are 30 industrial stocks thought to be representative of industrial stocks in general. Dow Jones & Company , a financial and investment publisher based in New York, also calculates averages for utility stocks, transportation stocks and bonds. Just a few of the 30 companies in the DJIA are: American Express, AT&T, Bethlehem Steel, Boeing, Chevron, Disney, Coca-Cola, General Motors and IBM. 
High 
    The highest price that was paid for a security during a certain time period. This can be expressed daily, weekly, monthly, or for a 52 week period. For example, the high for the day was $20, but the high for the year was $30. 
Inside information 
    Any knowledge about a company, its products, or securities not generally available to the public gained from a source inside the company. It is illegal for anyone to makes a securities trade based on what they believe to be inside information. 
Interest 
    1) Money charged by a lender to a borrower for the use of his or her money. 2) Payment on an investment made at periodic intervals. 
Investment 
    Anything of value purchased to provide capital appreciation and/or income. Examples include stocks, bonds, mutual funds, unit investment trusts, certificates of deposit, money market funds and collectibles. Investments may also include artwork, antiques and real estate. 
Liability 
    A financial obligation or debt. 
Limit order 
    An order to a broker to buy a certain stock (future, etc.) only if its price falls to a specified level or to sell a stock only if the price rises to a specified level. 
Low (price) 
    The lowest price a security or commodity has reached in a certain period of time such as a daily low or annual low. 
NASDAQ (National Association of Securities Dealers Automated Quotation System
    The NASDAQ National Market consists of over 3,000 companies that have a national or international shareholder base, have applied for listing, meet stringent financial requirements and agree to specific corporate governance standards. To list initially, companies are required to have significant net tangible assets or operating income, a minimum public float of 500,000 shares, at least 400 shareholders, and a bid price of at least $5. 
New York Stock Exchange 
    The New York Stock Exchange is located on Wall Street in New York City. It is the largest securities exchange in the United States.  Bud says: "Visit the New York Stock Exchange now." 
Preferred stock 
    Stock that receives preferential treatment over common stock with respect both to dividends and claims on assets in the event that the corporation goes out of business. 
S & P 500 (Standard & Poor's 500 Stock Index
    An index of 500 stocks widely traded on the New York Stock This index is used as a measure of performance of the overall market. Considered by many to be a much more accurate picture of the market in general. 
Sales charge 
    A transaction fee or commission paid for an investment instrument. Commonly referred to as the "load" in a mutual fund. 
Selling short 
    The reverse of the usual stock market technique, short selling is based on the anticipation that a particular security price will go down. The practice of short selling involves borrowing shares of a security from your broker and immediately selling them at the current price. Then, as the price of that security declines, you buy back an equal number of shares on the open market and use them to cover the shares you borrowed from your broker, and make a profit.  For instance, if you sell short 100 shares of XYZ Corporation at $50.00 a share and the price of the stock drops to $35.00, your profit is $15.00 a share, or $1500.00. Short sellers lose when the price of the stock ascends rather than descends. Theoretically, there is more risk involved with short selling because a stock price could continue to rise forever. A stock purchased at $10.00 a share can only fall to zero. A stock sold short at $10.00 could go to $20.00, $30.00, $40.00, etc. 
Share
    A unit representing a measure of ownership in a corporation. See: stock. 
Stock Exchange
    An organization that provides its members with the place and resources to buy and sell stocks. Example: American Stock Exchange 
Stock Split
    An increase in the number of outstanding shares in a corporation. This is usually brought about by the division of existing shares. For example, a two-for-one split means that shareholders will receive two new shares for each old share, making a total of three. Alternately, a reverse stock split brings about the decrease in the numbers of shares in a corporation. 
Stock symbol 
    A unique lettering system assigned to a particular stock or mutual fund. For U.S. securities, one, two and three letter symbols indicate that the security is listed and trades on an exchange.  NASDAQ traded securities have a four or five letters assigned to them. If a fifth letter appears on a NASDAQ security, it identifies the issue as other than a single issue of common stock or capital stock. 
Stop Order 
    An order to buy or sell a security conditioned on a specific price. This order is very often referred to as a "stop loss" order. because it prevents the security from falling below a certain price. 
Ticker
    A ticker is a trading screen information display showing the current price, volume, etc. of a particular stock, option, future, etc. 
Ticker symbol
    A ticker symbol represents a particular security (company, option, etc.) on the exchange it is trading on and is used to retrieve information about that security from that exchange. For example: the symbol "f" on the New York Stock Exchange will bring you information about Ford Motor Company. Ticker symbols can be used to retrieve information from a financial publication such as your daily paper's business section or the Wall Street Journal. Today, ticker symbols can be submitted to an electronic ticker quote retrieval system to find information about a particular security instantly. 
Volume 
    The total number of shares, bonds, or other units of a security traded in a certain time period. 
Wall Street 
    A street in the city of Manhattan, New York where several major brokerage firms and stock exchanges are located.
 

This site was created by Roderick Hames
for the primary purpose of teaching and demonstrating computer & business skills..
Any distribution or copying without the express or written consent of
Alton C. Crews Middle School or its creator is strictly prohibited.
***
Any questions, comments or suggestions concerning
this simulation or this handbook should be forwarded to
Roderick Hames, Computer Science / Business Education Teacher
©1998, Alton C. Crews Middle School: CS Dept - 8th Grade