Casandra Ramos
4/1/13
Pg. 276, 1-3
Pg. 290, 1-4
Pg. 299, 1-3
Page 276
1. Companies issue common stock to raise money to start up their businesses
and then to help pay for ongoing activities.
2. Most investors purchase common stock to make money in three different
ways: They profit when they receive dividends, when the dollar value of their
stock appreciates and when the stock splits and increases in dollar value.
3. Preferred stock is considered a “middle investment.” It’s considered a safer
investment than common stock, but not as safe as bonds. People who want a
steady source of income often buy preferred stock.
Page 290
1. Different types of Stock Investments
 Blue-Chip Stocks
 Income Stocks
 Growth Stocks
 Cyclical Stocks
 Defensive Stocks
 Large-Cap Stocks
 Small-Cap Stocks
 Penny Stocks
2. Sources to Evaluate Stocks
 Newspapers
 Internet
 Stock Advisory Services
 Corporate News Publications
3. Current Yield, Total Return, Earning per Share, and the Price-Earning.
4. If the company is earnings increase then the stock’s price goes up too. But if
the company’s earnings lower and the stock value lower then you may
consider selling the stock and replacing it with one of higher value.
Page 299
1. The primary market is a market in which investors purchase new security
issues from a corporation trough an investment bank or some other
representative of the corporation. The secondary market is a market for
existing financial securities currently traded among investors.
Casandra Ramos
4/1/13
Pg. 276, 1-3
Pg. 290, 1-4
Pg. 299, 1-3
2. Full service charges the highest commission in exchange for personalized
service and free research information. Discount brokerage firms do not
charge a lot of money for research reports but the fees can add up.
3. Long-Term Techniques
 Buy-and-Hold Technique
 Dollar-Cost-Average
Shot-Term Techniques
 Buying on Margin
 Selling Sorting