INVESTING+AND+STOCKS

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__**Investing and Stock**__
__Vocabulary__ Bull Market:a period of generally using stock prices

Interest: payment for the use of money

Investor: a paper who buys stocks of bonds with the hopes of earning a profit

Profit: the money earned by a company

Quote:the current price of a stock or bond

Stockholder: an individual who owns stock in a corporation

Bond: a certificate, written and sold by the government of a company that promises to repay borrowed money with interest

Bid: the price someone says he or she will pay for stocks or bonds of a given time

Initial Public Offering (IPO): first sale of stock

Primary: Company receives money

Secondary:reported in the newspaper "Wall Street Journal"

Institutional Investors: trade large volumes of stocks

Shareholders: people who own stock in the company

Dividends: distributions of each

Brokerage:a firm that provides you access to the stock market

Commission: fee for carrying out a transaction

= = = = = = = Investing and Stocks =

Behavior of Investors
 * 1) __Examples of stock transaction__
 * Buying or selling stock will require you to open an account at the __brokerage__, a firm that provides you access to the stock market.
 * commission fee- fee for carrying out transactions
 * full-service brokerage- offers advice and executes trades for you.
 * discount brokerage- reduced level of service, lower costs,ability to trade on your online.
 * 1) __Investing in Bonds__
 * A bond is a promise to repay a certain amount of money at some point in the future.
 * Each bond has a face value, and a stated rate of interest that will be paid annually to the bondholder until the bond expires.
 * This expiration date is known as the bond's maturity, or maturity date.
 * Face value is when the bond's maturity value is printed on the front of the bond.
 * A bond's interest rate is called a coupon rate.
 * Coupon payments means regular interest payments.
 * A bond's value moves up and down due to interest rate changes or the ability to repay a bond.
 * Types of Bonds
 * Treasury bonds finance the debt of the U.S. government.
 * There is no risk since the federal government stands behind them.
 * The interest earned on Treasuries is subject to federal tax but exempt from state and local income taxes.
 * Federal agency bonds are used to buy mortgages to encourage home ownership.
 * Municipal bonds are issued by state and local government.
 * Investors do not pay federal taxes on the interest from municipal bonds.
 * They may also escape state and local taxes if they live in the region, where the bonds originate.
 * Large firms may issue corporate bonds.
 * Corporate bonds have all degrees of risk depending on company strength.
 * Junk bonds are the highest risk.
 * Institutional Investors-trade large volumes of stocks on behalf of large institutions.
 * Shareholders-people who own stock in the company.