cpcu 556 ch 5

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  1. Common Stock
    The residual ownership of a corporation that is entitled to all assets and earnings after other claims have been paid and that generally has voting control; the fundamental ownership equity
  2. Earnings per share
    A measure of value for a common stock; determined by dividing the income available to common shareholders by the average number of common shares actually outstanding
  3. Diluted earnings per share
    A measure of value for a common stock computed by dividing the income available to common shareholders by the average common shares actually outstanding plus the potential shares that would be outstanding if the dilutive effect of employee stock options and other stock awards outstanding, covertible securities, and warrants were considered.
  4. Pro forma earnings per share
    An adjustment to earning per share reflecting the effect if the company used a fair value at vesting approach to valuing stock based compensation plans in determining their cost to the corporation
  5. Price earnings (p/e) ratio
    A measure of value for a common stock; determined by dividing the market price of the stock by the current earnings per share of the corporation
  6. Net asset value (book value) per share
    The measurement of the amount of assets a corporation has working for each share of common stock. It is calculated by taking the net balance sheet values of corporate assets, subtracting the face value of creditors' and preferred stockholders' claims, and dividing the remainder by the average number of outstanding common shares
  7. Current dividend yield
    The percentage that the annual cash dividend bears to the current market price of the stock
  8. Dollar cost averaging
    The investment of a certain sum of money, at regular intervals, in the same stock
  9. Market order
    An order to buy or sell securities at the best price obtainable in the market at the moment
  10. Limit order
    An order that specifies the maximum price the investor is willing to pay for securities or, if selling, the minimum price the investor is willing to accept
  11. Open order
    A securities order that is good until cancelled
  12. Day order
    A securitites order that is good only for the day on which it is ordered
  13. Stop loss order
    An order generally used to sell a stock once its price reaches a certain point, usually below the current market price
  14. Stop limit order
    An order used by an investor who wishes to use a stop order to buy or sell a stock at a specific price, with a limit order to prevent the broker from buying or selling for more or less than the particular specified price
  15. Cash account
    A brokerage firm account that allows investors to put up some of their own money to purchase securities and borrow the remainder
  16. Selling short
    Selling securities that the investor either 1. does not possess and therefore must borrow to settle the account or 2. does possess, but does not wish to deliver
  17. Growth stock
    A stock usually considered to be part of a company whose sales and earnings are expanding faster than the general economy and faster than those of most stocks

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cpcu 556 ch 5
2011-10-25 04:45:42
cpcu 556

ch 5
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