Investment and Securities Flashcard

Front

What are the two types of equity securities?

Back

Common stock and Preferred stock.

Front

What is a key feature of preferred stock compared to bonds?

Back

It is perpetual with no maturity date.

Front

What might cause a brokerage firm to sell out a customer's securities?

Back

Due to non-payment.

Front

What is the relationship between interest rates and the value of preferred shares?

Back

Inverse relationship.

Front

What is a call feature in preferred stocks?

Back

Allows the corporation to call in or redeem the preferred stock.

Front

Define equity securities.

Back

Securities that represent ownership in a company, typically in the form of stocks.

Front

What is the primary difference between common stock and preferred stock?

Back

Common stock typically has voting rights, while preferred stock usually does not.

Front

What are dividends?

Back

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Front

What is a bond?

Back

A fixed income instrument that represents a loan made by an investor to a borrower.

Front

What does it mean for a stock to be callable?

Back

The issuer can redeem the stock at a predetermined price before its maturity.