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Econ Chapter 16 - actually sells it for more than they paid...

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Econ Chapter 16 Bond- document that formally promises to pay back a loan under specified terms, usually over a specific time period o Properties Issued with a face value (what you loan) Maturity date (when they pay back) Fixed payment of a specified amount paid by issuer to holder (coupon) o Fixed-income securities o Price of bond changes o Interest rate increases = bond prices decrease Stock- a certificate that certifies ownership of a certain portion of a firm o Share of common stock- certificate that represents the ownership of a share of a business (corporation) o Capital gain- an increase in thee value of an asset o Realized capital gain- the gain that occurs when the owner of an asset
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Unformatted text preview: actually sells it for more than they paid for it • Reasons for stock prizes o Expectations of future dividends (payouts) o Expectations of when dividends will be received • Dow Jones Industrial Average-an index based on the stock prices of 30 actively traded large companies the oldest and most widely followed index of stock market performance • NASDAQ composite- index based on stock prices of 5000+ companies traded on NASDAQ stock market. Takes name form National Association of Securities Dealers Automated Quotation System • Standard and Poor’s 500- based on standard prices of largest 500+ firms traded on NYSE, NASDAQ, and American Stock Exchange...
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