Chapter 21

Question	Answer
Bond Yield	Total annual interest divided by total cost.
Bonds	Written promise by a company that borrows money usually with fixed-interest payment until maturity (repayment time).
Cash Dividend	Cash distribution of company's profit to owners stock.
Common Stocks	Units of ownership called shares. Has voting rights.
Cumulative Preferred Stock	Holders of preferred stock must receive current year's dividends and any dividends in arrears before any dividends are paid out to the holders of common stock.
Discount	Amount bond sells below $1,000
Dividends	Distribution of company's profit in cash or stock to owners of stock.
Dividends in arrears	Dividends that accumulate when a company fails to pay cumulative dividends to preferred stockholders.
Earnings per share (EPS)	Annual Earnings / Total # of shares outstanding
Mutual Fund	Investors by shares in the fund's portfolio (group of stocks and/or bonds).
Nest Asset Value (NAV)	The dollar value of one mutual fund share; calculated by suntracting current liabilities from current market value of fund's investments and dividing this by the number of shares outstanding.
Odd Lot	Less than 100 shares.
Price Earnings Ratio (PE Ratio)	Closing price per share of stock divided by earnings per share.
Preferred Stock	Type of stock that has a preference regarding a corporation's profits and assets. Has no voting rights.
Premium	Periodic payments that one makes for various kinds of insurance protection.
Round Lot	Multiple of 100 shares.
Stock Certificate	Evidence of ownership in corporation.
Stock Yield	Dividend per share divided by the closing price per share.
Stockbrokers	People who with their representatives do the trading on the floor of the stock exchange.
Stockholders	One who owns stock in a company.
Stocks	Ownership shares in the company sold to buyers, who receive stock certificates.

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