Chap002 - Chapter 2 Buying and Selling Securities Slides...

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Chapter 2 Buying and Selling Securities Slides 2-1 Fundamentals of Investments 2-2 Buying and Selling Securities 2-3 Buying and Selling Securities 2-4 Getting Started 2-5 Choosing a Broker 2-6 Example of Brokerage Commissions 2-7 Choosing a Broker, I. 2-8 Choosing a Broker, II. 2-9 Security Investors Protection Corporation 2-10 Broker-Customer Relations 2-11 Brokerage Accounts 2-12 Margin Accounts 2-13 Example: Margin Accounts, The Balance Sheet 2-14 Margin Accounts 2-15 Example: The Workings of a Margin Account, I 2-16 Example: The Workings of a Margin Account, II 2-17 Example: The Effects of Margin, I 2-18 Example: The Effects of Margin, II 2-19 Example: The Effects of Margin, III 2-20 Example: How Low Can it Go? 2-21 Example: How Low Can it Go? Answer. 2-22 A Note on Annualizing Returns 2-23 Example: Annualizing Returns 2-24 Hypothecation and Street Name Registration 2-25 Other Account Issues, I. 2-26 Other Account Issues, II. 2-27 Short Sales, I. 2-28 Short Sales, II. 2-29 Example: Short Sales, I. 2-30 Example: Short Sales, II. 2-31 Example: Short Sales, III. 2-32 More on Short Sales 2-33 Investment Objectives 2-34 Investment Strategies and Policies 2-35 Investor Constraints 2-36 Useful Internet Sites 2-37 Chapter Review, I 2-38 Chapter Review, II
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A-11 Chapter 2 Chapter Organization 2.1 Getting Started A. Choosing a Broker B. Online Brokers C. Security Investors Protection Corporation D. Broker-Customer Relations 2.2 Brokerage Accounts A. Cash Accounts B. Margin Accounts C. A Note on Annualizing Returns D. Hypothecation and Street Name Registration E. Other Account Issues 2.3 Short Sales A. Basics of a Short Sale B. Short Sales: Some Details 2.4 Investor Objectives, Constraints, and Strategies A. Risk and Return B. Investor Constraints C. Strategies and Policies 2.5 Summary and Conclusions Selected Web Sites www.gomez.com (reference for information about on-line brokers) www.nasd.com (referenced in text for dispute resolution) www.bearmarketcentral.com (reference for short selling) www.moneycentral.msn.com (reference for risk aversion) www.sharebuilder.com (reference for opening a brokerage account) www.buyandhold.com (reference for opening a brokerage account)
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Buying and Selling Securities A-12 Annotated Chapter Outline 2.1 Getting Started To get started, simply set up a trading account with a broker. You will supply basic information and sign a customer's agreement. You then give your broker a check and instructions on how to invest your money. When your purchase (or sell) a stock you will pay a commission to the broker and you will instruct the broker whether to hold the shares or deliver them to you. A. Choosing a Broker To open an account you must choose a broker. There are typically three groups: Full service brokers, discount brokers, and deep-discount brokers. Full service brokers provide many services, including investment advice,
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This note was uploaded on 08/12/2009 for the course FIN 315 taught by Professor Wheeler during the Spring '09 term at Loyola New Orleans.

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Chap002 - Chapter 2 Buying and Selling Securities Slides...

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