Important terms to know Asset - Resource with economic value that a person or company owns with the expectation that it will provide a future benefit. Bear Market - Condition of financial markets in which stock prices are falling. Bond - Fixed income instrument that represents a loan made by an investor to a borrower. Bull Market - Condition of financial markets in which stock prices are rising. Compound Interest - Interest calculated on the principal and the accumulated interest, basically interest on interest. Dividend - Portion of company earnings paid to shareholders. Earnings Report - Filing made by a public company that reports financial performance. Liability - Financial obligation to pay someone, basically a debt. A liability is the opposite of an asset, it takes your money away. Revenue - Income generated, not accounting for expenses. Stock - Piece of a company that signifies ownership and claims part of the corporation’s assets and profits. Ticker - Symbol to uniquely identify a particular stock on the market. Important abbreviations to know DCA- Dollar-Cost Averaging - A strategy that allows an investor to buy the same dollar amount of an investment regularly. DPS - Dividends Per Share - The dollar amount of dividends paid per share. DJIA - Dow Jones Industrial Average - Price-weighted index that tracks 30 large publicly-owned companies trading on the NYSE and Nasdaq. ‘The Dow’ is one of the most-watched indices in the world. EPS - Earnings Per Share - Portion of a company's profit allocated to each share of stock. ETF - Exchange Traded Fund - Basket of assets, such as stocks or bonds, that tracks an underlying index. FAANG - Facebook, Apple, Amazon, Netflix, and G oogle. An acronym created to capture the collective impact these companies have on the markets. IPO - Initial Public Offering - Process of offering shares of a corporation to the public for the first time. NYSE - New York Stock Exchange - Stock exchange considered to be the largest equities-based exchange in the world, based on total market cap. NASDAQ - National Association of Securities Dealers Automated Quotations - Second-largest stock exchange by market cap, they have fewer restrictions for stocks placed onto the exchange, so generally has a worse quality/smaller size of stocks. REIT - Real Estate Investment Tr ust - Company that owns, operates, or finance real estate investment properties. S&P 500 - Standard & Poor’s 500 - Capitalization-weighted index of the 500 largest stocks in the U.S. Regarded as the best gauge of large-cap U.S. equities. YTD - Year To Date - Refers to the period from the first trading day in the year to the present, current day. Important ratios and percentages to know P/E ratio - Price to Earnings ratio - Used to value a company that measures its current share price relative to its EPS. PEG ratio - Price Earnings/Growth - Stock price compared to an underlying companies earnings and growth. Quick Ratio - Indicator of a company’s short term liquidity position and the ability to meet its short term needs with its liquid assets. Book value - Tells how much a company is worth if it stopped operating and sold off all assets and paid off all debts. P/S ratio - Price/Sales - Comparison of a company’s market cap to its revenue. Basically an indicator of the value placed on each company’s sales. When compared to competitors, it can reveal which company is overvalued or undervalued based on this metric. Payout ratio - Percentage of earnings paid as dividends to shareholders. Quarterly revenue growth - Increase in a company’s sales when compared to the previous quarter’s performance. Quarterly earnings growth - Increase in a company’s earnings when compared to the previous quarter’s performance. Basic Terms Accumulation - Gradual gathering/buying of an investment. Allocation - Portion of portfolio distributed among different investments. Analyst - Financial professional with expertise in evaluating investments, usually to make buy, sell, and hold recommendations, or to give estimates for a company’s financials before a company reports their earnings. Ask - The price that a seller is willing to accept for a stock. Averaging down - Process of buying shares at a lower price than you originally bought to lower your average price, in hopes of the share price to rise in the future. Balance sheet - Financial statement that shows a company’s assets, liabilities, and shareholders’ equity. It shows what the company owns and owes, as well as the amount invested into the company from shareholders. Bear - Someone who has reason to believe a stock will go down. Bearish - A belief that a stock will go down. Beta - Relative measure of volatility. The market average is 1, below 1 is less volatile than average and vice versa. Bid - Offer made by an investor, or trader, to buy a stock. Bid-ask spread - Amount by which the asking price exceeds the bid price for a stock. It’s the difference between the highest price that a buyer is willing to pay for a stock and the lowest price that a seller is willing to accept. Blue-chip stocks - Stock of a large, well-established and financially sound company that has operated for many years. Brokerage - Account that allows an investor to deposit funds and buy assets through it. Bull - Someone who has reason to believe a stock will go up. Bullish - A belief that a stock will go up. Capitalization-weighted index - Stock index determined by the market capitalization of its holdings. The stock weighting, the impact the stock has on the index and the market cap are all proportional. Cash Flow Statement - Financial statement that measures how well a company manages its cash, to pay back their debts and operating expenses. Catalyst - Event or revelation that propels a stock dramatically up or down. Commodities - Basic good used in commerce that is interchangeable with other commodities of the same type. Common Stock - Most common type of stock which has voting rights, but the dividend is not insured (meaning the company doesn’t have to pay for it), but can go up each year and is the last to get paid (If a company goes bankrupt, a common stock shareholder is the last and most likely to not get paid what they deserve.) Defensive stock - A stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market. Discount brokerage - A do-it-yourself brokerage account that has low costs, but offers few services compared to a full-service brokerage account. Dividend Date - Date when the company pays a dividend to its shareholders. Earnings call - Conference call between the management of a public company, analysts, investors, and the media to discuss the company’s financial metrics results during the quarter, you can go to the company’s website or your brokerage to listen to the call. Earnings Season - The months of the year during which most quarterly company earnings released to the public. Earnings season starts one to two weeks after the last month of each quarter. (Mid-January, mid-April, mid-July, and mid-October.) Equity - The difference between the value of the assets and the value of the liabilities of something owned, basically the net worth of a company. Equity = assets - liabilities Ex-Dividend Date - Date which the company announces the payment of a dividend. Expense Ratio - A fee that determines how much a fund’s assets are used for administrative and operating purposes. Fed - Federal Reserve System - Central banking system of the U.S. used to implement the country’s monetary policy and provide a national system of ready cash. Fiscal Quarter - 3-Month period on a company’s calendar that acts as a basis for periodic financial reports (earnings reports.) Float - Shares a company has issued to the public to trade. Full-service brokerage - Account with a financial advisor, who helps their clients develop investment plans. A full-service brokerage charges higher fees but offers more research tools and financial data. Fundamental Analysis - Taking a look into the economic fundamentals (Income Statement, Cash Flow Statement, etc.) of a company, and deciding if it is a good investment. Income statement - Financial statement used for reporting a company’s financial performance over a specific period by tracking the revenue, expenses, gains, and losses. Industry - Very specific group of companies or businesses, more defined than a sector. Intrinsic Value - A perceived value of a company, found using fundamental analysis. Liquid assets - Assets that can easily be converted to cash. Liquidity - The availability of liquid assets. Long - Said when people own stock. “I am long $ABC.” Margin Account - Brokerage account in which a broker lends money to the customer, at a specific interest rate. Margin Call - Occurs when the margin account value falls below the required minimum value. The broker demands the user/investor to deposit additional money so that the account is brought up to the minimum balance. Margin of Safety - Investing principle used when an investor only purchases an investment when the current price is below their intrinsic value or believed value. Market capitalization - Market Cap - Value of a company, calculated by multiplying the total number of shares by the current stock price. Moat - Distinct advantage a company has over its competitors, which allows it to protect its market share and profitability. Nasdaq Composite - Capitalization-weighted Index of more than 3,000 stocks listed on the Nasdaq exchange that includes the top technology stocks. Overbought - A security that analysts or traders believe is trading above its intrinsic value. Oversold - A security that analysts or traders believe is trading below its intrinsic value. Penny stock - Stock that is usually associated with small companies and a lack of liquidity, and trades under $5. Portfolio - A grouping of financial assets, such as stocks or bonds directly held by an investor. Profit Margin - Ratio to gauge profitability, which represents the percentage of revenue turned into profit. Preferred Stock - A type of stock that is paid a fixed dividend (no increase or decrease) before common shareholders and ranked in higher importance but does not have voting rights. Price-weighted index - Stock index where each holding is proportional to its stock price and impact the stock has on the index. The higher priced the stock is, the higher amount is held in the index. Resistance - A price level that a security doesn’t usually go above, made from sellers exiting the investment whenever the price reaches a certain high point. Can be made by drawing a line along with the highest highs of a chart. Reverse Stock Split - Corporate action that reduces the number of shares of a stock to increase the price. This is usually a bearish sign for the stock. Russell 2000 - Capitalization-weighted index measuring 2,000 small-cap American companies and used for the small-cap stock exposure. Sector - Broad term describing the business type. There are only about a dozen sectors. Security - Type of financial instrument that holds some type of monetary value. Shareholder - Someone who holds a share of stock. Shareholders Equity - Represents the amount of money that would be returned to the shareholders if all the assets were liquidated and all company’s debts paid off. If positive, the company has enough assets to cover its liabilities and vice versa. Short - Sale of a stock that the seller has borrowed from a brokerage, and will try to buy back lower, for a profit. The risk of loss is unlimited, so it should only be used by experienced traders. Stake - A part or percentage of a company that is owned by a shareholder. Stock Buyback - Happens when a company buys back its stock for making use of its cash and reducing the shares on the market, making each share worth more (in theory.) Stock Split - Corporate action that increases the number of shares by dividing each share, which lowers the price. This is usually a bullish sign for the stock. Split Factor - How a stock splits and by how much. Example: a 2-for-1 stock split will split the number of shares you own by 2 and half the price. The total market value of your shares will remain the same. The ‘2-for-1’ is the split factor if the stock split. Support - A price level that a security doesn’t usually fall under, made from buyers entering the investment whenever the price falls to a certain point. Can be made by drawing a line along with the lowest lows of a chart. Technical Analysis - Looking into the security by analyzing the price action and volume rather than looking into the investment through the analysis of fundamentals. Technical analysis is based on historical data, like patterns, to predict where it might go next. Unicorn - Private startup company valued over $1 billion. Volume - Number of shares of a stock traded in a specific period. Watchlist - List of stocks being watched for potential trading or investing opportunities. Whisper number - Unofficial and unpublished EPS estimates, determined by investors and researchers (not analysts.) Quizzes If Coca-Cola raised its $1 dividend by 10%, how much more would investors get after every payment? 1. 2. 3. 4. $0.01 $0.10 $0.25 $1.20 If Apple’s stock is currently $110, and the stock rose 5%, what price would Apple be at now? 1. 2. 3. 4. $106 $110 $115.50 $116 If Walmart's stock was $80 and jumped 10% on good news, what would the stock price be? 1. 2. 3. 4. $81 $86 $88 $90 If Amazon was at $1,000 and went up 50% in one year, what would the stock price be? 1. 2. 3. 4. $950 $1,050 $1,300 $1,500 What is the stock ticker for McDonald’s? 1. 2. 3. 4. MDS MCS MCD DNS What is the stock ticker for Coca-Cola? 1. 2. 3. 4. CC KO COCL CO How many stocks are in the S&P 500? 1. 2. 3. 4. 300 400 500 1000 How many stocks are in the Dow? 1. 2. 3. 4. 10 20 25 30 Which type of stock has no voting rights? 1. 2. 3. 4. Preferred Common Original Exclusive A dividend is usually paid when? 1. 2. 3. 4. Weekly Monthly Quarterly Annually Who founded Apple? 1. 2. 3. 4. Bill Gates Adam Sandler Warren Buffett Steve Jobs Who founded Amazon? 1. 2. 3. 4. Warren Buffet Steve Jobs Jeff Bezos Bill Gates Who founded Microsoft? 1. 2. 3. 4. Steve Jobs Bill Gates Warren buffett Jeff Bezos How often do earnings report happen? 1. 2. 3. 4. Monthly Quarterly Semi-annually Annually A stock is like a small _____ of a company. 1. 2. 3. 4. Price Piece Company Return What tells how much a company is worth if it stopped operating and sold off all assets and paid off all debts? 1. 2. 3. 4. Networth Expense Equity Bankruptcy What is Compound Interest? 1. 2. 3. 4. Interest on interest Money making more money The exponential growth of your money All of the Above What is the payout ratio? 1. 2. 3. 4. The number of times a company pays a dividend The amount of money the company earns The number of paid employees to high paid executives The percentage of earnings paid as a dividend to shareholders A private company turns public after their ___. 1. 2. 3. 4. Infinite Private Opening Interesting Public Offering Initial Public Offering Impressive Poor Order The higher the ________ yield, the more you get paid. 1. 2. 3. 4. Dividend Money Ratio Payout When a stock raises its dividend, the price of the stock usually goes ____. 1. 2. 3. 4. Up Down Nowhere None of the above When a stock lowers its dividend, the price of the stock usually goes ____. 1. 2. 3. 4. Up Down Nowhere None of the above What is a dividend? 1. 2. 3. 4. A way to lose money A payment from the company to the shareholders A bankruptcy payment All of the above What type of stock is the most common? 1. 2. 3. 4. Funded Private Common Accepted What is the stock ticker for Disney? 1. 2. 3. 4. DNY DIS DSN DIN What should you do if the stock market falls? 1. 2. 3. 4. Buy Sell Don't think about it Never invest again What counts as an investment in yourself? 1. 2. 3. 4. Books Courses Webinars/Seminars All of the above What type of analysis takes the economic fundamentals into account? 1. 2. 3. 4. Fundamental analysis Technical analysis Economic analysis None of the above What type of investment takes the price action and volume into account? 1. 2. 3. 4. Fundamental analysis Technical analysis Economic analysis None of the above If a stock falls, and it is undervalued, growing, and worth your money, what do you do? 1. 2. 3. 4. Buy Sell Ignore it Don’t buy it, because it could fall more Stocks go __ when people think they are undervalued and will return their money and then some in the future. 1. 2. 3. 4. Up Down Sideways None of the above What is a basket of stocks called? 1. 2. 3. 4. ETF Mutual fund Index fund All of the above If a stock goes below, $_ then it is considered a penny stock. 1. 2. 3. 4. 1 3 5 10 What is the perceived valuation of a company found by fundamental analysis? 1. 2. 3. 4. Fundamental value Intrinsic value Economic value None of the above Which stock exchange is the largest? 1. 2. 3. 4. NYSE NASDAQ TSX LSE How is the DJIA weighted? 1. 2. 3. 4. Equally Capitalization-weighted Price-weighted Randomly What is a distinct competitive advantage of a company called? 1. 2. 3. 4. Margin of competitiveness Moat Demand Profit What is the ratio to gauge profitability? 1. 2. 3. 4. Gauge Ratio Profit Probability Profit Margin Revenue Margin Which brokerage offers less data, but has lower fees? 1. 2. 3. 4. Full-service brokerage International Brokerage Cheap brokerage Discount Brokerage What is the net worth of a company called? 1. 2. 3. 4. Equity Liability Profit Revenue What is an indicator of a company’s short term liquidity position, and the ability to meet its short term needs with its liquid assets called? 1. 2. 3. 4. Quick ratio P/E ratio Dollar ratio Liquid ratio What ratio is used to value a company by comparing the EPS to the price of a company? 1. 2. 3. 4. P/G ratio EPS ratio P/E ratio H/E ratio What does FAANG stand for? 1. 2. 3. 4. Facebook, Apple, Amazon, Nestle, Groupon Fannie Mae, Atari, Amazon, NextEra, Google Ford, Alcoa, Apple, Nike, GM Facebook, Apple, Amazon, Netflix, Google Which stock exchange is the second largest? 1. 2. 3. 4. NYSE NASDAQ LSE TSX Which index comprises 500 different companies? 1. 2. 3. 4. S&P 500 Russell 2000 Nasdaq 100 Dow Jones Industrial average Which index comprises 2000 different companies? 1. 2. 3. 4. S&P 500 Russell 2000 Nasdaq 100 Shanghai 100 What is the stock ticker for Amazon? 1. 2. 3. 4. AMAZ AAON AZN AMZN What does DPS stand for? 1. 2. 3. 4. Dollar Per Share Dollar Price Shy Dividends Per Share Dow Price State What is the opposite of an asset? 1. 2. 3. 4. Liquid asset Hard asset Liability Expense How is Year-to-date abbreviated? 1. 2. 3. 4. YETD YTD YTOD YTDT What is an analyst? 1. 2. 3. 4. A person who owns more than 1,000 shares of stock A financial professional with expertise in evaluating investments A beginner who just entered the stock market An expert who just sold all their stock What is the opposite of a bid? 1. 2. 3. 4. Ask Offer Spread Sale What is beta? 1. 2. 3. 4. An investment A relative measure of volatility A safe dividend A small company What is a float? 1. 2. 3. 4. Shares a company has issued to the public to trade Shares of a company short How many shares of stock owned by one person The time when a stock price rises Which is not a financial statement? 1. 2. 3. 4. Cash Flow Statement Income Statement Balance Sheet Expense Report Which is more specific than a sector? 1. 2. 3. 4. Group Space Industry Block What is an asset that can easily be converted to cash? 1. 2. 3. 4. Water asset Liquid asset Easy asset Hard asset What type of stock split is usually a bearish sign? 1. 2. 3. 4. Stock split Reverse stock split Sideways stock split None of the above What is it called when a company buys back its stock? 1. 2. 3. 4. Company indulgence Stock buyback Company repurchase Stock absorption What is a private startup valued over $1B called? 1. 2. 3. 4. Startup Unicorn Nine-0s 1-in-a-billion Which index tracks small-cap stocks? 1. 2. 3. 4. Russell 2000 S&P 500 DJIA NASDAQ How long is the fiscal quarter? 1. 2. 3. 4. 1 week 4 weeks 3 months 6 months What is the date in which the company announces the payment of a dividend? 1. Payment date 2. Ex-dividend date 3. Dividend date 4. Earnings report What is the value of a company called? 1. Networth 2. Equity 3. Market Cap 4. Profit Margin What is a strategy that allows investors to buy the same dollar amount of an investment regularly? 1. 2. 3. 4. DCA DPS EPS ETF What is a portion of a company's profit allocated to each share of stock called? 1. 2. 3. 4. Exchange-Traded Fund Initial Public Offering Profitability Earnings Per Share What is the expense ratio? 1. 2. 3. 4. The ratio of dividends lost The ratio of fees charged in your brokerage account A fee that is paid for administrative and operating purposes of an ETF, or fund A fee in which a company's executives charge your account for holding stock Which ratio takes the stock price, earnings and earnings growth into account? 1. 2. 3. 4. P/E ratio PEG ratio P/B ratio Quick Ratio What is the comparison of a company’s market cap to its revenue called? 1. 2. 3. 4. Cap-to-rev ratio P/S ratio M/R ratio Sales ratio What does a bear believe will happen to a stock? 1. 2. 3. 4. It will go up It will go down It won’t move It will have a good earnings report What does a bull believe will happen to a stock? 1. 2. 3. 4. It will go up It will go down It won’t move It will have a good earnings report What happens in a bull market? 1. 2. 3. 4. Stocks go up Stocks go down Stocks don't move Stocks stop trading What happens in a bear market? 1. 2. 3. 4. Stocks go up Stocks go down Stocks don't move None of the above What does the Balance Sheet include? 1. 2. 3. 4. Assets Liabilities Shareholder’s equity All of the above What is the difference between the highest price that a buyer is willing to pay for a stock and the lowest price that a seller is willing to accept for a stock called? 1. 2. 3. 4. Float Shareholder’s equity Bid-ask spread None of the above What type of stock index is determined by the market cap of its holdings? 1. 2. 3. 4. Equally-weighted index Capitalization-weighted index Price-weighted index Random-weighted Index When you accumulate an investment, what do you do? 1. 2. 3. 4. Buy Sell Ignore it None of the above What does the Cash Flow statement measure? 1. 2. 3. 4. How well a company manages its cash How much employees they have How their revenue is distributed among expenses What type of investors own the stock What is a catalyst? 1. 2. 3. 4. The reason why a stock has earnings reports An event that propels a stock dramatically up or down The reason why a CEO steps down A scandal that happens within a company What is a conference call between the management of a public company, analysts, investors, and the media to discuss the company’s financial metrics results during the quarter called? 1. 2. 3. 4. Earnings call Earnings report Profit conference Money report What is the months of the year which most company report earnings called? 1. 2. 3. 4. Earnings call Expense ratio Earnings season Bid-ask spread What is a symbol to uniquely identify a particular stock on the market? 1. 2. 3. 4. EPS Ticker Dividend Operating system What does a REIT operate, manage or finance? 1. 2. 3. 4. Companies Start-ups Real estate Amusement parks What type of stock is large, well-established and financially sound that has operated for many years? 1. 2. 3. 4. Diversified Blue-Chip S&P 500 Green-Sound What is a bond? 1. 2. 3. 4. An excuse to not buy a stock A reason why the stock goes down A fixed-income instrument that represents a loan made by an investor to a borrower A mortgage taken out by a real estate company, and has not been paid back Why are defensive stocks good? 1. 2. 3. 4. They remain relatively stable through economic downturns They help supply guns and weapons to defend against their country They go up most of the time They are relatively new and open to changes in the market What is a group of financial assets held by an investor called? 1. 2. 3. 4. Group Basket Portfolio Investor data What type of price level does an investment not usually go above? 1. 2. 3. 4. Support Resistance Balance None of the above What type of price level does an investment not usually go below? 5. 6. 7. 8. Support Resistance Balance None of the above What is someone who holds a share of stock called? 1. 2. 3. 4. Stock owner Part-company owner Asset Shareholder What does DCA stand for? 1. 2. 3. 4. Dividend Cost Average Dollar Cumulative Asset Dividends Cross Admiration Dollar Cost Averaging How is profit calculated? 1. 2. 3. 4. Revenue + Profit Expenses - Liabilities Revenue - Expenses Expenses + Liabilities What does the Income Statement track? 1. 2. 3. 4. Revenue Expenses Gains/Losses All of the above Which type of brokerage account lends money to investors at a specific interest rate? 1. 2. 3. 4. Cash Account Margin Account Moat Account Real estate account What is the number of shares of stock traded in a specific time period called? 1. 2. 3. 4. Stock Volume Interest Rate Margin What is a list of stocks being watched for investment opportunities called? 1. 2. 3. 4. Unicorn Resistance Watchlist EPS What usually happens every fiscal quarter? 1. 2. 3. 4. Earnings reports Dividend payment Quarterly results All of the above The point of investing in the stock market should be to what? 1. 2. 3. 4. Accumulate wealth Collect dividends Invest for the long term All of the above What is the whisper number? 1. 2. 3. 4. Unofficial earnings forecasts not made by analysts The unofficial dividend growth prediction The predicted price of the stock in the future The CEOs salary Answers 1. 2. 3. 4. 5. $0.10 $115.50 $88 $1,500 MCD 6. KO 7. 500 8. 30 9. Preferred 10. Quarterly 11. Steve Jobs 12. Jeff Bezos 13. Bill Gates 14. Quarterly 15. Piece 16. Networth 17. All of the above 18. The percentage of earnings paid as a dividend to shareholders 19. Initial Public Offering 20. Dividend 21. Up 22. Down 23. A payment from the company to the shareholders 24. Common Stock 25. DIS 26. Buy 27. All of the above 28. Fundamental analysis 29. Technical Analysis 30. Buy 31. Up 32. ETF 33. 5 34. Intrinsic value 35. NYSE 36. Price-weighted 37. Moat 38. Profit Margin 39. Discount brokerage 40. Equity 41. Quick ratio 42. P/E ratio 43. Facebook, Apple, Amazon, Netflix, Google 44. NASDAQ 45. S&P 500 46. Russell 2000 47. AMZN 48. Dividends per share 49. Liability 50. YTD 51. A financial professional with expertise in evaluating investments 52. Ask 53. A relative measure of volatility 54. Shares a company has issued to the public to trade 55. Expense Report 56. Industry 57. Liquid asset 58. Reverse stock split 59. Stock buyback 60. Unicorn 61. Russell 2000 62. 3 months 63. Ex-dividend date 64. Market Cap 65. DCA 66. Earnings Per Share 67. A fee that is paid for administrative and operating purposes of an ETF, or fund 68. PEG ratio 69. P/S ratio 70. It will go down 71. It will go up 72. Stocks go up 73. Stocks go down 74. All of the above 75. Bid-ask spread 76. Capitalization-weighted index 77. Buy 78. How well a company manages its cash 79. An event that propels a stock dramatically up or down 80. Earnings call 81. Earnings season 82. Ticker 83. Real Estate 84. Blue-Chip 85. A fixed-income instrument that represents a lan made by an investor to a borrower 86. They remain relatively stable through economic downturns 87. Portfolio 88. Resistance 89. Support 90. Shareholder 91. Dollar Cost Averaging 92. Revenue - Expenses 93. All of the above 94. Margin account 95. Volume 96. Watchlist 97. All of the above 98. All of the above 99. Unofficial earnings forecasts not made by analysts
