3B2 ULTIMATE ABSA FULL STUDY SHEET
QUESTIONS AND CORRECT ANSWERS
COLLECTION
●● preferred stock
Answer: A special type of stock whose owners, though not generally
having a say in running the company, have a claim to profits before
other stockholders do. Fixed Dividends
●● Rights
Answer: Allows shareholders to purchase stocks to maintain
proportionate share
●● Warr
Answer: Allows investor to buy stock at set price.
●● ADR
Answer: Allows us citizens to easily buy foreign stocks.
●● ex-dividend date
Answer: the date two business days before the date of record,
establishing those individuals entitled to a dividend
,●● Stock Split
Answer: an increase/decrease in the number of outstanding shares of a
company's stock. No change to total value.
●● Short Sale
Answer: the sale of shares not owned by the investor but borrowed
through a broker and later purchased to replace the loan
●● Outstanding Shares
Answer: the total number of shares of stock that are owned by
stockholders on any particular date
●● Treasury Stock
Answer: A corporation's own stock that has been reacquired by the
corporation and is being held for future use.
●● Par Value
Answer: a value assigned to a share of stock and printed on the stock
certificate
●● Statutory Voting
Answer: Each share gets one vote in the election of each board nominee
,●● Cumulative Voting
Answer: a system in which a shareholder can accumulate all of his or her
votes and vote them all for one candidate or split them among several
candidates
●● Capital Gains
Answer: profits from the sale of an asset,realiized is taxed.
●● Rights Offering
Answer: Existing shareholders are given the right to buy new shares at a
discount to the current market price;
Dilutes ownership unless option is exercised;
30-45 days time frame on average
●● Warrants
Answer: long-term options to buy a stated number of shares of common
stock at a specified price,Combined with bonds, to make them more
interesting to investors. Issued with excersise price above current market
value.
●● Blue Chip Stocks
Answer: stocks of large, well-established corporations with a solid
record of profitability
, ●● Cyclical Stocks
Answer: Stocks whose success is closely linked to the rise and fall of the
general economy
●● Defensive Stocks
Answer: stocks that remain stable during economic declines
●● Growth Stocks
Answer: stocks in corporations that reinvest their profits into the
business so that it can grow
●● Systematic Risk
Answer: Risk inherent to the entire market or market segment.
●● Non-systematic risk
Answer: - Company Specific Risk
- minimized with diversification
●● Cumulative Preferred Stock
Answer: Preferred stock on which undeclared dividends accumulate
until paid; common stockholders cannot receive dividends until
cumulative dividends are paid.
QUESTIONS AND CORRECT ANSWERS
COLLECTION
●● preferred stock
Answer: A special type of stock whose owners, though not generally
having a say in running the company, have a claim to profits before
other stockholders do. Fixed Dividends
●● Rights
Answer: Allows shareholders to purchase stocks to maintain
proportionate share
●● Warr
Answer: Allows investor to buy stock at set price.
●● ADR
Answer: Allows us citizens to easily buy foreign stocks.
●● ex-dividend date
Answer: the date two business days before the date of record,
establishing those individuals entitled to a dividend
,●● Stock Split
Answer: an increase/decrease in the number of outstanding shares of a
company's stock. No change to total value.
●● Short Sale
Answer: the sale of shares not owned by the investor but borrowed
through a broker and later purchased to replace the loan
●● Outstanding Shares
Answer: the total number of shares of stock that are owned by
stockholders on any particular date
●● Treasury Stock
Answer: A corporation's own stock that has been reacquired by the
corporation and is being held for future use.
●● Par Value
Answer: a value assigned to a share of stock and printed on the stock
certificate
●● Statutory Voting
Answer: Each share gets one vote in the election of each board nominee
,●● Cumulative Voting
Answer: a system in which a shareholder can accumulate all of his or her
votes and vote them all for one candidate or split them among several
candidates
●● Capital Gains
Answer: profits from the sale of an asset,realiized is taxed.
●● Rights Offering
Answer: Existing shareholders are given the right to buy new shares at a
discount to the current market price;
Dilutes ownership unless option is exercised;
30-45 days time frame on average
●● Warrants
Answer: long-term options to buy a stated number of shares of common
stock at a specified price,Combined with bonds, to make them more
interesting to investors. Issued with excersise price above current market
value.
●● Blue Chip Stocks
Answer: stocks of large, well-established corporations with a solid
record of profitability
, ●● Cyclical Stocks
Answer: Stocks whose success is closely linked to the rise and fall of the
general economy
●● Defensive Stocks
Answer: stocks that remain stable during economic declines
●● Growth Stocks
Answer: stocks in corporations that reinvest their profits into the
business so that it can grow
●● Systematic Risk
Answer: Risk inherent to the entire market or market segment.
●● Non-systematic risk
Answer: - Company Specific Risk
- minimized with diversification
●● Cumulative Preferred Stock
Answer: Preferred stock on which undeclared dividends accumulate
until paid; common stockholders cannot receive dividends until
cumulative dividends are paid.
