Stock Market Concepts

Acquisition

When one company purchases a majority stake in the acquired.

Annual General Meeting (AGM)

A mandatory yearly meeting of shareholders that allows stakeholders to stay informed and involved with company decisions and workings.

Annuity

A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash w for an individual during their retirement years.

Arbitrage

The difference between price of a security in two different exchanges. The difference can be used to make profits by persons holding a security to sell the same at an exchange where its price is high and buy it at an exchange where it is available at a lower price.

Bad Debt

A debt that is not collectible and therefore worthless to the creditor. This debt, once considered to be bad, will be written the company as an expense.

Balance Sheet

A financial statement that summarizes a company�s assets, liabilities and shareholders� equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.

Balanced Fund

A mutual fund that invests its assets into the money market, bonds, preferred stock, and common stock with the intention to provide both growth and income.

Bankruptcy

The state of a person or m unable to repay debts.

Basis Point

A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a field-income security.

Bear Market

A market condition in which the prices of shares are falling or are expected to fall.

Blue Chip

A nationally recognized, well-established and financially sound company.

Bond

A debt investment with which the investor loans money to an entity (company or government) that borrows

the funds for a defined period of time at a specified interest rate.

Book Closure

A company�s announcement of a dividend or bonus to investors.

Book Value

The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.

Boom

A period of time during which sales or business activity increases rapidly.

Broker

An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.

Bubble

A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive sell-o occurs.

Bull Market

A financial market of a certain group of shares in which prices are rising or are expected to rise.

Bullion

Gold and silver that is officially recognized as high quality (at least 99.5% pure), and is in the form of bars rather than coins.

CAGR

The year-over-year growth rate of an investment over a specified period of time. It�s an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate

Capital Gain

An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.

Capital Gains Tax

A type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price.

Cash Flow Statement

This document provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given quarter.

Closely Held Shares

The shares held by individuals closely related to a company.

Closing Price

The final price at which a security is traded on a given trading day.

Commodity

A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services.

Commodity Index

An index that tracks a basket of commodities to measure their performance.

Crash

A major decline in a financial market.

Written by princy