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chapter 16
Investment concepts
| Question | Answer |
|---|---|
| Asset allocation | The porportion of funds invested in various catagories of assets, such as money market instruments, long-term debt, stocks, and real estate. |
| Bear market | A falling stock market |
| Bull market | A rising stock market |
| Capital gain | A change in the market value security |
| Dividend yield | The part of the total return associated with the dividendsd paid by the firm. It is computed by divideng the amount of dividends paid by the current stock price. |
| holding period return( HPR ) | The return earned over the period of time that an investment is held, which might be 6 months, 1 year, or 5 years. |
| Income securities | Investments such as preferred stocks and corporate bonds, that offer steady dividends or interest payments. |
| Limit order | An order to buy or sell a stock at no worse than a specified price. |
| Margin requirement | The minimum percentage of the total purchase price that an investor must have to buy stock( or other investment ) on margin. |
| Margin trading | When an investor borrows from his?her broker some portion of the funds needed to purchase an investment. |
| Margin capitalization | The total market value of a firm's stock, which can be computed by muliplying the number of shares outstanding by the market price per share. |
| Margin order | An order to execute a transaction at the best price available when the transaction reaches the market. |
| Short selling | A situatiion in which an ivestor borrows the stock from another investor and then sells it, but promises to replace the stock at a later date. |
| Stock symbol | The trading initials of a company; the reference used by brokers when trades are made and price quotes are retrieved. |
| Stop order | An order that specifies the price at which a market order is initiated. |
| Street name | A situation in which a stock is registered to the brokerage firm, rather than the individual investor. |