FINANCIAL TERMINOLOGY

% Yield:	The yield represents the dividend return an investor can expect on each share of stock purchased. It is calculated by dividing the dividend that each share pays by its cur-rent market value, and is expressed as a percentage. Example: $1 in dividend divided by a price of $ 10 - 10% yield $1 in dividend divided by a price of $5 - 20% yield
401(k) plan:	A retirement plan which allows an employee to set aside a specified amount of tax-deferred income.
Accidents Hazards:	An accident is an occurrence, which results in damage or loss to a firm. A hazard is something that causes the chance of risk or danger.
Accounts Payable:	Money the company owes for supplies and services it buys.
Accounts Receivable:	The amount that customers owe to a business.
AMEX:	Nickname of the American Stock Exchange, Inc., which lists medium-sized companies. AMEX was founded in 1842, although, before 1953, it was known as the New York Curb Exchange.
Angel:	A friend, relative, or someone else willing to invest in a risky company that is just starting.
Annual Growth:	The increase in sales of a company compared to its previous year's sales, expressed as a percentage.
Annual Report:	A yearly report corporations prepare for stockholders, informing them of the company's operations and earnings. A report conducted on a company's financial status over a period of time is helpful in analyzing the firm's financial position. The income statement in the report totals the firm's revenue, subtracts expenses and pinpoints how much money the company made or lost during this time period.
Annual Report:	The annual statement published by a corporation after the close of itsfiscal year. The annual report includes the balance sheet and profit and loss statements of the proceeding and current years.
Annual Sales:	The annual sales of a company.
Annuity:	A contract where payments are made for a specific period of time in return for receipt of a future series of payments. Social Security is a type of annuity.
Asset:	Anything that is owned and has financial value. Everything a company owns.
AuctionMarket:	When buy and sell orders of individuals and institutions meet on a trading floor as a stock exchange acts on behalf of those individuals.
Available Equity:	The amount of equity available for supporting additional buy and short sell transactions after deducting the initial margin requirement on existing positions. (Available equity = equity in portfolio - initial margin requirement.)If this figure is negative, the team portfolio is not satisfying the 50% initial margin requirement, therefore, all buy and short sell transactions will be rejected. AVAILABLE EQUITY = Equity in Portfolio - Initial 50% Margin Requirement
Balance Sheet:	A list of everything a company owns and owes at a given time. The amount of everything owned always equals how much the company owes plus how much belongs to its owners.A financial statement describing a company's financial situation at a moment in time.The balance sheet includes a company's assets, liabilities and shareholders' equity on a given date, usually the last day of its financial year.
Balance:	All purchases, broker's fees, losses or gains are deducted from or added to the balance. A positive balance indicates cash, while a negative balance signifies the amount of a loan (margin).
(Open) Balance:	Balance not spent (previous week carried over) of initial $100,000.A negative number means a loan was executed (margin). This balance was carried over from the previous week's end balance (what was left).
(End) Balance:	Balance not spent of the initial $100,000 at close of week activity. A negative number means a loan was executed and team is in margin.
Bankruptcy:	A legal process in which a company unable to repay its debts either stays in business and gradually pays what it owes or goes out of business and sells its assets to pay its debts.
Bear Market:	A period of time - usually two consecutive months or more - in which prices on the stock market are falling and in which falling prices result in at least a 20% decrease in the market value of share prices.
Beta:	Beta refers to risk measurement or volatility of a stock (i.e., the percentage of change for the stock's return compared to the change in the return of the market). If the returns are the same, the ratio is 1.0. A beta of 1.00 means that the stock has the same percentage of changeas the market. If one tries to perform better than the market, a beta greater than 1.00 would be desired. A high beta # would indicate more volatility than the current market. When the market indicators shift, the high beta stock will move more in the direction that the stock is presently headed. For example, if a stock has a beta of 1.35 and the market has changed by 10% how much has the stock changed in return? Example: 1.35 - X / 10 percent X = 13.5 percent* *'Me 13.5% stock return change indicates that this stock has a greater risk of change than the market.
Blue Chip:	A reference to a certain type of company or its stock. A blue chip company is nationally known, highly esteemed and noted for the quality and wide acceptance of its products and services as well as for its consistent record of making profits and paying dividends. The stock of blue chip companies is called blue chip stock. The term comes from poker, where a blue chip is the most valuable. A large, well-known business that has a long record of earnings and dividends.
Board of Directors:	The people stockholders elect to represent them when overseeing the management of a corporation.
Bond Fund:	A mutual fund that invests in bonds.
Bond:	An IOU issued by companies or by federal, state, and local governments when they borrow money.
Book Value Per Share:	A company's equity divided by the number of shares outstanding.
Book Value/Overpriced:	The book value is the difference between the f='s assets and liabilities which determines what the stockholder owns after all debts are paid. S & P's Stock Guide or Value Line would be a good resource for this information. Calculate the current price using the example given to determine if the stock is overpriced. See example:
	Codes	Example
	P - Price of Stoc	P = P/E X E
	P/E - Price Earnings Ratio E = Earnings of the Stock	P = 15 X $3 P = $45*
	*If the current price of the stock is greatly over $45 per share, it may be overpriced.
Broker Recommendation:	Financial ideas or suggestions for investments are offered by brokerage firms or brokers who act as intermediaries between a buyer and a seller. A commission is charged for this service.
Broker:	Business that earns a commission by bringing together buyers and sellers of stocks, bonds, and mutual funds. Also called a stockbroker. A broker is a person who is licensed to act as an agent, executing buy and sell orders, for any individual or group that wishes to invest in the stock market.
Broker's Fee:	A fee is charged on all transactions. The total of these fees for the week and since the start of The Game are listed on the weekly team portfolio. Example: BROKER'S FEE =.02 (Number of Shares x Execution Price)
Brokerage House:	Business that earns a commission by bringing together buyers and sellers of stocks.
Bubble:	(Mania) People bid the price of a stock higher than is justified by the company's earnings.
Bull Market:	A period (usually 3 months or more) when stock prices rise by 50 percent or more. Investors generally expect fut-ther increases in stock prices.
Business Cycle (GDP):	The business cycle is divided into four phases of the economy peak recession, trough, recovery; the Gross Domestic Product (GDP) is a good reference for measurement. Most businesses that produce goodsand services try to earn a profit; therefore, the state of the economy is an important criteria for business growth and future profits.
Buy Order:	A transaction that is initiated by an investor in order to buy stock.
Buying Power:	The maximum dollar amount of purchases and short sell transactions that could be executed in a portfolio within the 50% initial margin requirement (buying Power = available equity/initial margin requirement or available equity x 2). Note that the payment of broker's fees and interest charges not only reduces your balance, but also reduces your ability to borrow. Buying power is computed daily, after 4:00 p.m. ET. BUYING POWER = Available Equity x 2 (or Available Equity -.50)
Capitalism:	(Free enterprise) Individuals are free to own, trade, and use things to produce and sell goods and services.
Cartel:	A group of sellers that get together and act like a monopoly.
Cash flow statement:	A record of a company's sources and uses of cash during a period such as one year.
CEO:	Chief Executive Officer. The top official of a corporation.
CFO:	Chief Financial Officer.
Chain store:	One of many stores that sell the same products and are owned and centrally managed by a particular company.
Charting:	Charting is the plotting of the high, low and closing prices of a stock for a period of time.
Close Price:	The final, or last traded, price of a stock at the close of the trading day.
Collateral:	Property (e.g., securities owned) pledged by a borrower to protect the interest of the lender.
Corrunission:	A fee charged by a broker or dealer for services performed in buying or selling stock on behalf of a customer.
Common Stock:	An equity security that represents ownership in a corporation. This is the first security a corporation issues to raise capital. Investor who buys this type of stock can get involved in how the company is run by voting at the company's annual meeting. Common stockholders can elect officers - people responsible for making company decisions all year - or oust ones they think aren't doing a good job. A type of equity security that represents ownership in a corporation. Common stock may be of several classes, all usually combined with voting rights. Holders of common stock are not guaranteed any set amount of dividends.
Communism:	All property is owned in common and its use is determined by the government.
Company Competition:	An individual or group who forms a business to produce things for other people. Domestic and foreign competition requires managing, marketing, advertising and efficient use of productive resources (land, labor and capital) to maintain a healthy market share and earnings. In a case where foreign competition offers lower labor and raw material costs, the group may be faced with difficult decisions about how to lower costs to be price competitive. Competition is the rivalry between businesses of a given industry for a buyers' money.
Compound Growth:	A periodic multiplying of savings. Often called compound interest.
Conglomerate:	A business takes over companies producing unrelated goods or services.
Consumer Growth:	A business that sells relatively inexpensive products that consumers continue buying when the economy turns down.
Contrarianism:	The theory that small investors are usually wrong and that it is therefore advantageous to pursue strategies that are opposite to the popular investing trend.
Corporation:	A business created as a distinct legal entity and composed of one or more individuals or entities.
Correction:	A sudden reversal in the direction of stock prices by 10 percent or more.
Cost of Goods Sold:	Costs specifically associated with manufacturing finished products, including the cost of raw materials.
Cost:	The value of a stock purchase transaction (price x number of shares). The total cost is this value plus the broker's fee.
Current Assets:	Things that a company owns and will be sold for cash during the year.
Current Closing Price:	This is the last trading price recorded when the market closed for the day. If the closing price is higher or lower than 5% from the previous day's closing price, the entire listing for that stock is boldfaced in some publications.
Current Debt Ratio:	A balance sheet sets forth the various types of assets and liabilities of the firm. An excess of current assets (cash, inventory, accounts receivable) over current liabilities (accounts payable, short-term debt, etc.) is viewed as favorable. This information is expressed in the current debt ratio. A ratio of 1.0 means that assets are equal to liabilities. A ratio greater than 1.0 means that assets are greater than liabilities. A ratio less than 1.0 means that assets are less than liabilities. While there are many exceptions, analysts often say that minimum safety requires a current ratio of 2.11 is means that for each dollar in current liabilities, there are two dollars in current assets.
Current Liabilities:	Debts that a company expects to pay off during the year.
Custodial Account:	An account at a brokerage firm established by a parent or guardian for a young investor under the "age of majority."
Cyclical Company:	A business selling expensive products that consumers often postpone buying when the economy turns down. A stock whose value tends to rise and fall along with the economy. Cyclical stock generally rises during a booming economy and falls during a recession.
Debit:	A debt or negative balance.
Default:	The issuer of a bond fails to make interest payments or to pay back all it borrowed.
Delisted:	A company's stock may be taken off the stock listing (such in your newspapers and on an exchange) if it goes bankrupt, merges with another company, moves from one exchange to another, or doesn't meet the minimum standards required to be listed.
Demand:	The amounts of something people want to buy at different possible prices.
Depreciation:	Periodic reduction in the value of buildings, equipment and other assets due to wear and tear.
Discount Broker:	A "no-frills" broker who charges a lower commission and only executes trading orders. Discount brokers do not offer investment advice or any other services.
Diversification:	The acquisition of a group of assets in which the returns of the assets are not directly related over time. An investor seeking diversification for a securities portfolio would purchase securities of firms that are not similarly affected by the same variables in order to average the risk of loss.
Divestiture:	A business sells one of its divisions.
Dividend:	The distribution of a portion of net earnings paid by a corporation to its shareholders, usually quarterly. With preferred stock, dividends are usually fixed; with common shares, dividends vary with the fortunes of the company.
Dow Jones Averages:	The averages of industrials, transportation and utilities that are published daily. The most commonly referred to averages on Wall Street. The Dow Jones Averages is used to determine how the overall market is doing.
Dow Jones Industrial Average:	It is not practical in a single day to look at all stocks traded and get a snapshot of how the market performed. Averages, like the Dow, look at a list of stocks that represent American business. The Dow looks at 30 stocks and averages their prices in a single day. So when an investor says the Dow is up 10 points over yesterday, you know those same 30 stocks gained value, and the market as a whole did well.
Downsizing:	A reduction in a company's size and the number of people it employs so the business can survive and grow in the future. (Also known as restructuring, rightsizing, or getting leaner and meaner.)
Economic Climate:	The outside forces that affect businesses, such as interest rates, inflation, consumer spending, and government taxes and regulations.
Economy:	Combination of individuals' choices as buyers, sellers, producers, savers, and investors.
Efficient:	Producing what consumers want in the least-costly way.
Entrepreneur:	People who risk their savings in new, innovative ventures that promise a profit.
EPS (Earnings Per Share):	Net income divided by number of common shares. EPS is one of the most-often-used figures in analyzing a company and its stock and is a key measure of a company's profitability
Equity In Portfolio:	The net liquidating value of a team portfolio (excluding broker's fees). (Equity in portfolio ending balance + value of long position). EQUITY IN PORTFOLIO = Ending Balance + Value of Long Position
Equity:	In a financial sense, the value of a person's ownership in real property beyond the amount that is owed on it. A shareholder's equity in a corporation is the value of the shares he or she holds.
Estate Planning:	The process of organizing your personal and financial affairs so that your assets are managed and transferred to your family with a minimum of inconvenience and expense. Estate planning also attempts to minimize transfer taxes during this process.
Factors of Production:	The factors of production used by a firm to produce their goods or services should be considered when investing in a company. Land - Natural resources; gifts of nature in and on the land. Labor - Human resources; education, skills, talent, strength, training, health, etc. Capital - business capital; equipment, machinery, new factories, roads, ports, computers, etc. Entrepreneurship - innovation, creation, risk; combines land, labor and capital
Federal Budget Deficit:	Me amount the federal government borrows in a given year when its income from taxes falls short of its spending.
Federal Debt:	The amount the federal government owes.
Federal Reserve System (Fed):	The nation's central bank, established in 1913 to regulate the money supply.
Financial Planning:	A process used by individuals to reach specific financial objectives.This process includes asset organization, goal setting, development andcoordination of written plans, saving and investing, and periodic reviews to make sure the plan is on track.
Fiscal Policy:	Consider whether the current fiscal policy favors contraction or expansion of the economy. A (Contraction or contractionary policy is when tax rates go up and/or federal government spending goes down. Expansion):An expansionary policy is when tax rates go down and/or federal government spending goes up.
Fixed annuity:	A contract whereby payments are made in return for payment of a set amount of money at some future date. Individuals must invest cash values of the annuity in a limited number of safe investments.
Fortune 500:	Fortune magazine's annual list of the largest U.S. industrial and service corporations.
Free Enterprise:	(Capitalism) Individuals have the freedom to own, trade, and use things to produce goods and services for sale.
Free-Market:	Free enterprise or capitalism.
Full-Service Broker:	Broker who earns a higher commission by providing more adviceand other services to customers.
Future Economic Predictions:	A consideration of the leading indicators index to predict the direction of future economic activity would be useful in the investment analysis.
Generation X:	Americans born between 1961 and 198 1.
Going public:	A corporation sells new shares of stock to the public for the first time. (IPO)
Govt. Policies &	The government's policies and regulations may encourage or discourage corporate expansion Regulations and growth.
Gross Margin:	Gross income divided by net sales. Gross margin is always expressed as a percentage.
Growth Company:	A company with a record of steadily rising earnings. (Yearly earnings of low-growth companies rise by 5-10 percent, of moderate-growth ones by 10-20 percent, and of high- growth companies by 25 percent or more.)
Growth Prospect:	A common stock that has increased in earnings, year-after-year, would indicate that the company is growing. One hopes that the company will continue to grow so that the earnings will increase. The price of a stock should continue to increase, so that the stock can be sold for a good profit.
Growth Stock:	A stock whose return to investors comes from increases in share price. Growth stock might pay few or no dividends because much of its earnings are used to keep the company growing.
GTC (Good TillCanceled):	A term used when buying or selling stock. A GTC order remains in effect until and unless it is carried out or canceled.
Hi/Lo (52 wk):	'Me first two columns listed on the stock tables shows the highest and lowest prices for the stock during the preceding 52-week period. This price does not include the latest trading day.
Holdings:	All the stocks an investor currently owns.
Hybrid Fund:	A mutual fund that invest in a mixture of stocks and bonds.
Income Statement:	A record of a company's income, expenses, and resulting profit (or loss) over a period such as one year.
Income Statement:	A statement of revenues and earnings for a given period of time, usually one year.
Income Stock:	A stock that has a consistent record of paying high dividends.
Index Fund:	A mutual fund that invests in the stocks of a particular index, such as the S&P 500.
Index:	An index, usually called a market index, is an average, counted in points, that is used to determine the performance of the stock market,as well as the overall economy.
Industry Type:	A group of companies that produce or sell the same kind of product or service is called an industry. Example: auto or music industry.
Inflation (CPI):	An increase in the amount of money in circulation that lowers the value of money. Inflation results in higher prices paid for goods and services. The Consumer Price Index (CPI) is used to measure the current inflation rate. A decrease in the buying power of money that occurs when the level of prices goes up.
Initial Margin:	The percentage (currently 50%) of collateral required in order to finance a purchase or short sell Requirement:transaction. Initial margin requirement = .50 x (value of long positions + value of short positions). The concept of a margin requirements is aimed at: 1) limiting the extension of credit to finance trading in stocks (the Federal Reserve sets margin requirements); and 2) providing a cushion or protection to the broker making the loan of money (purchases) or stock (short sales) against adverse changes in the market value of the collateral (long and short positions). 50% INITIAL MARGIN REQUIREMENT =.50 x (Value of Short Positions + Value of Long Positions)
Initial Public Offering(IPO):	A company's first sale of stock to the public. Securities offered in a IPO are not always those of young small companies seeking outside equity capital and a public market for their stock. Investors purchasing stock in IPO's generally assume very large risks for the possibility of large gains.
Insider Trading:	Is the term used for an illegal practice in securities trading and is a form of cheating. This occurs when information that is not available to the general public is used by a few investors to gain an unfair advantage over the other investors in deciding to buy or sell their interests in a company's stock.
Insurance:	Coverage by a contract binding a party to protect another against specified loss in return for premiums paid.
Interest On Loans:	Interest is charged on loans using an average daily balance method. The average daily balance used in producing a particular interest charge is shown as part of the entry in the weekly team portfolio. It is derived by totaling the balances (add if cash and subtract if a loan) at the end of each of the seven calendar days in the SMG week (Monday through Friday or paper game - Friday through Thursday) and devising the net result by 7. If the average daily balance is positive, interest will be paid at 5%. If it is negative, interest will be charged at 7% and is calculated by the following formula: INTEREST ON LOANS = Average Daily Balance x 7 x Interest Rate 360100 The 360-day year is the bases commonly used by banks to calculateinterest charges, the so called bank rate of interest. 'Me interest rate is the same as that used by brokers at the beginning of SMG2000 and is printed on your weekly portfolio as part of the interest charge entry.
Inventories:	Merchandise that a company hasn't yet sold.
Invest:	To buy a stock or other asset that promises to return more money in the future.
Investment Company Act of 1940:	A federal law, enforced by the Securities and Exchange Commission (SEC), that requires any investment company (mutual fund) to provide important information for investors and to follow certain rules in itsoperation and in its management of money.
Invisible Hand:	Adam Smith's term for demand and supply, which arises as individuals voluntarily trade with one another in competitive markets.
Junk bond:	A corporate bond that usually pays a higher interest rate because there is a greater risk that its issuer will default.
Leveraged Buyout:	Buying a company with borrowed money.
Life Cycle:	The firm may be young, growing, maturing or failing. Management may use a merger,acquisition, new technology, human resource development and diversification to revive and renew the firm if it is in amature or failing stage.
Limit Order:	A type of order where the investor sets a limit on the price at which the broker can buy or sell.
Limited Liability:	An investor's responsibility to pay a company's debts is limited to the amount invested.
Liquidate:	When a company goes out of business, usually because of poor financial performance, it sells all of its assets (computers, building, materials, etc.), called liquidating or taking the company to cash or an execution of a sell or short cover transactions.
Listed Exchange:	One of the organized stock markets with a centralized trading floor. In this market, auction type trading allows traders to sell stocks to the highest bidder or buy stocks from the lowest seller. These markets consist of the New York Stock Exchange and the American Stock Exchange, both of which are located in New York City. Also included are the regional stock exchanges found outside of Now York City; these are the Boston, Cincinnati, Intermountain (Salt Lake City), Midwest (Chicago), Pacific (Los Angeles and San Francisco), Philadelphia (Philadelphia and Miami) and Spokane stock exchanges.
Load:	An entry fee (sales charge) that customers pay when buying shares of some mutual funds.
Long Position:	Cumulative number of stocks purchased which are presently contained in a portfolio. Value of long positions is simply the sum of each long position multiplied by the current price. VALUE OF LONG POSITION = Current Price x Number of Shares Owned
Long-Term Debt:	A company's loan and other debt obligations whose term to maturity is greater than one year. Long-term debt is usually accompanied by interest payments.
Long-Term:	Designating a gain or loss in the value of a security that has been held over a specific amount of time. Describing a liability for which a long period of time remains until payment of the face amount comes due.
Maintenance MarginRequirement:	This is the minimum margin requirement, 30% in SMG, that a team portfolio must maintain after the 50% initial margin requirement. Maintenance margin requirement = .30 (value of long positions + value of short positions). If equity in portfolio is less than the maintenance margin requirement, a team is said to be under-margined or over-extended and a margin call is issued. 30% MAINTENANCE MARGIN REQUIREMENT = .30 x (Value of Short Positions + Value of Long Positions)
Management/Labor:	The age, vigor, creativity, openness, ability and organizational style of the operating executives are all important considerations when analyzing a corporation. A sound strategic plan, with company objectives and methods to reach them, will eventually be reflected in the financial position of the firm. Good labor-management relations are also favorable to investment strategies. Furthermore, human resource development and training programs for workers should be animportant consideration. A key way for a firm to increase productivity is to invest in human capital.
Margin Buying:	Buying stocks with money borrowed from a broker.
Margin Call:	A warning that a portfolio is overextended; a request for additional equity in an amount needed to meet the 30% maintenance margin requirement. A team has 7 consecutive days to generate additional equity by selling or short covering stock to meet the 30% maintenance margin requirement. If the margin requirement is not satisfied within 7 consecutive days, the computer is progranuned to automatically satisfyit by liquidating sufficient long and short positions, beginning with thelowest priced stocks.
Margin:	Is a loan that can be used for investing, like having an investment credit card issued by a broker. It is borrowing and using the securities you own as collateral. An investor can legally borrow up to 50% of the price of the collateralized security. This frees up more of the investor's cash because he is only using part of his own money to buy stock. The investor must pay interest on the loan, but doesn't repay the entire amount until he sells the stock.
Market Maker:	A dealer in the NASDAQ Stock Market who buys and sells particular stocks and makes a profit on the price difference.
Market Multiple:	("What the market is selling for.") The average price-earnings ratio of a number of companies comprising the Dow Jones Industrial average, S&P 500, or some other measure.
Market Order:	An order to buy (or sell) stock at whatever the price happens to be when the order is executed.
Market Trend:	An upward or downward movement of the market that lasts for anextended period of time
Market Value:	No. of shares outstanding multiplied by price per share.
Market:	People buying and selling also - the Marketplace is the place to go to get information about companies whose stock you might want to buy.
Mark-To-Market:	An adjustment to a portfolio balance for the amount of gain (decline invalue) or the loss (increase in value) caused by price changes of short positions.
Mass Production:	Large-scale production of many units of a product resulting in its lower cost and price.
Merger:	Two businesses become one company.
Monetary Policy:	Consider whether the current monetary policy favors contraction or expansion of the money (Contraction orsupply. A contractionary policy is when the discount rate goes up; when the reserve Expansion): requirement goes up; and/or the Federal Reserve sells government securities. Expansionary policy is when the discount rate goes down; when the reserve requirement goes down; and/or the Federal Reserve buys government securities.
Money Market Account:	An interest bearing checking account that is a type of mutual fund typically comprised of safe, highly liquid investments with a maturity of one year or less.
Money Supply-	The total amount of currency and checkable deposits in the nation that people use when buying things.
Monopoly:	A market where only one business offers a particular good or service and is protected from rival sellers.
Mortgage:	The amount a bank or other institution lends you to buy a house or an apartment.
Mutual Fund:	A portfolio of diversified stocks and/or bonds which is controlled by a professional asset manager. Mutual fund shareholders each own a percentage of the total portfolio. The fund's shares can be traded at net asset value (NAV), the current proportional value of the stocks and/or bonds included in the portfolio. Individual mutual funds vary substantially in terms of the types of investments, the sales charges (if any), and the management fees.
NASDAQ:	National Association of Security Dealers Automated Quotations. NASDAQ trades thousands of companies through a national computerized network of dealers. It lists 4,700 companies,including Microsoft, Apple and Intel.
Net Change:	A change in value over time the difference between a stock's current price and its closing price on the previous trading day.
Net Income:	Also called net company earnings or net profits. The "bottom line" of an income statement. The amount by which total revenues exceed total expenses for a given period. The opposite of Net Income is Net Loss, which occurs when total expenses exceed total revenues.
Net Revenue:	A company's total income from sales and other sources.
New Technology:	A firm must be willing to use new human and capital resource management techniques to solve business challenges. It is important that firms use available technology to compete with similar firms. Firms should use the necessary computer technology to facilitate management and production. Does the firm plan for the use of new technology as it becomes necessary to maintain and improve earnings and market share?
No-Load Fund:	A mutual fund that doesn't charge an entry fee or load.
NYSE:	Oldest and most prestigious trading floor where stocks are bought and sold in an auction market. The New York Stock Exchange. Founded in 1790 in Philadelphia; became the NYSE in 1817. Today, the NYSE is one of the world's largest stock exchanges, where only the largest companies are traded.
Odd Lot:	Less than the normal unit of trading, which generally means less than 100 shares of stock. See round lot.
OTC (Over the Counter):	A way of trading stock other than trading on an exchange. Over-the-counter stocks are bought and sold primarily over the telephone through a national computerized network of dealers. Stocks of smaller companies are frequently bought and sold in this manner. Over-the-counter quotations are supplied by the National Association of Securities Dealers' Automated Quotations (NASDAQ) system. P/E (Price/Earnings)The price of a share divided by the earnings per share for a 12-month period. For example, the Ratio:P/E ratio of a stock selling for $60 a share and earning $6 a share would be 10 to 1.The P/E ratio is a calculation that evaluates a stocks relative performance and value. It is computed by dividing the stock's price by the company's per share earnings for the most recent four quarters. Higher P/E multiples suggest that investors are more optimistic about a stocks prospects than comparable lower P/E stocks, but the reasonsfor high and low P/Es also include the company's growth outlook, the industry in which the company is engaged, the company's accounting policies, and whether the company is a start-up firm or a more established business.
Penny Stocks:	Stock selling for less than $1.00 per share (less than $5 in the SMG).
Portfolio:	A collection of investments (including stocks, bonds, T-bills, real estate, or any other type of investment) owned by an investor.
Preferred Stock:	This type of stock is more expensive than common stock. These investors do not have voting rights, but get guaranteed dividends. A type of equity security that represents ownership in a corporation. Preferred stock pays a fixed dividend, has dividend and asset preference over cominon stock, and generally carries no voting rights.
Price Earnings Ratio (P/E):	A common stock analysis statistic in which the current price of a stock is dividend by the current (or sometimes the projected) earnings per share of the issuing firm. As a rule, a relatively high price- earnings ratio is an indication that investors feel the firm's earnings are likely to grow.
Price History:	The current stock price versus the past stock price.
Price Lin-tit:	A maximum or minimum price that an investor is willing to buy or sell stock for. When buying, it is the highest price the investor is willing to pay for the stock; when selling, it is the lowest price at which the investor is willing to sell a stock. The use of a price limit is optional and serves to protect the investor against sharp market movements.
Price-Earnings Ratio	A stock's current price divided by its latest annual earnings (12 mo.) per share. For example, a (PE):stock selling for $30 with annual earnings per share of $2 has a price-earnings ratio of 15 ($30 divided by $2= 15.) (Company earnings)
Private Company:	A company; that doesn't sell shares of ownership to the general public.Rights of individuals to use and trade things as they see fit.
Privately Held Corporation:	A corporation that allows only a select group of people to purchase its stock. Its stock is not publicly traded.
Privately-Held Company:	Is a company that does not issue stock to the public. Because one or a few owners in a private company take all the risk, they do not have to show or discuss their financial condition with the public.
Proceeds:	The value of a stock sell transaction (price x number of shares). Net proceeds are this value minus the broker's fee.
Productivity:	The amount a business can produce during a given time with its workforce, plant, equipment, and other resources. (More specifically,labor productivity is the amount a worker produces per hour.)
Products/Services:	The good or service produced by the firm should be considered along with the supply and demand for that good or service in the market.
Profit Margin:	Net income divided by revenue. Profit margin is always expressed as a percentage.
Profit:	(Earnings) Money left for investors after subtracting all costs ofproducing and selling something. The amount by which revenue exceeds cost.
Prospectus:	A docurnent~ issued by a company when it sells stock to the public, that presents information and facts about a company. The Securities Exchange Commission reviews the document for accuracy and thoroughness. This legal document is often used to describe a corporation to potential investors.
Public Company:	Is a company that issues stock to raise operating money. Investors buy the stock, and the public company takes the money to run and/or grow the company. Public companies must be accountable to stockholders who through their investments own the company. Stockholders elect a board of directors to make decisions for the company, and may re-elect or oust the directors each Year at the annual meeting. Public companies each must disclose their financial standings, usually done each year at the annual meeting. Public companies also must disclose their financial standings, usually done each year at the annual meeting and through the annual report. Public companies must also disclose their financial conditions at the end of each quarter (three months) of operation.
Quotation:	The price at which a stock is selling, at any given moment in time.
Recession:	A recession is a period of time during which business activity temporarily slows. It usually lasts several months, but can sometimes last as long as one to two years. In a recession, factories run at less than their full capacity, the level of employment decreases and businessprofits fall. Decline in production (GDP).
Red Herring:	The preliminary prospectus a company provides during an initial public offering. It is called a red herring because its warnings about the risks of buying shares are presented in red type.
Reinvestment Option:	Mutual fund investors can choose to have dividends automatically reinvested in a fund's shares.
Research & Development:	Research and development is significant to the progress of new projects and ideas for innovation.The type of industry and firm will determine the costs and significance of research and development.
Resources:	The basic elements used to produce goods and services.
Retained Earnings:	The amount of profits that a company keeps (retains) to invest in itself instead of giving to owners as dividends.
Right Justified:	The process of writing numbers so that the last digit is always placed as far to the right as possible, regardless of the size of the number.
Risk:	The possibility or chance of gain or loss.
Robber Barons:	A derogatory term coined by historian Matthew Josephson in the1920's to describe a small number of ambitious, determined men who amassed huge fortunes during the 1800's.
Round Lot:	Exactly 100 shares of stock. Ten round lots equal 1000 shares. Stocks are generally traded in round lots.
Russell 2000:	A stock index of 2,000 small-cap companies. (Of the 3,000 U.S. Businesses with the largest capitalization, the smallest 2,000 companies comprise the Russell 2000.)
S&P 500:	(Standard & Poor's 500 Stock Index) A measure of stock prices based on the common stocks of 500 major U.S. companies.
Safety:	This criteria refers to the financial safety of the principal and risk involved in investing. Risk is 'the likelihood of a loss or an expected return. There is a direct relationship between risk and reward. Generally, the lower the risk, the lower the potential reward. Investors to whom savings for retirement, the purchase of a home, or their children's education are major considerations would probably choose safety (low risk stocks) as an objective. Although no stock is absolutely safe, diversification of the portfolio can minimize the risk. The types of investment instruments with the lowest risk factor include high quality, highly rated, "blue chip" stocks, utility stocks such as many mutual funds and government bonds.
SEC:	The Securities and Exchange Commission. The SEC, founded in 1934, regulates the public stock exchanges in the US and monitors insider trading, which occurs when corporate officers buy or sell stock in their own company.
Secondary Offering:	The sale of a large block of existing, not newly-issued, securities with the proceeds going to the present holders rather than to the issuing firm.
Securities and Exchange Commission:	Is the regulator of the securities industry.
Securities and Exchange Commission(SEC):	A federal agency created by the Securities Exchange Act of 1934 to enforce U.S. securities laws.
Security:	Is the overall term for stocks and bonds.
Sell Order:	A transaction that is initiated by an investor in order to sell stock.
Selling Short:	An investment strategy whereby an investor borrows stock from a broker and sells it, hoping that the stock's price will drop. If it does, the investor can repurchase the stock at the lower price, return it to the broker, and pocket the profits. Buying back shares that have been sold short is called "covering the short position."
Shareholder:	Any investor who buys stock in a corporation, becoming part-owner of the corporation.
Shares Outstanding:	Shares of stock a company has issued and sold to investors (stockholders).
Short Cover:	Buying back stock originally borrowed from the broker in a short selltransaction, in order to return it to the broker. VALUE OF SHORT POSITION = Current Price x Number of Shares Sold Short
Short Position:	The period of time between when you borrow the stock from your broker and when you pay him back. The investor must pay interest onthe money for this period of time. So the longer the time between, thegreater the money paid. Value of short positions is simply the sum of each short position times the current price.
Sbort-Term:	One year or less. The interest rate is the amount paid for borrowingsomeone else's money.The amount is usually expressed as an annual percentage. Calculating this figure is done by dividing the amount of interest paid in one year by the amount borrowed.
Shortage:	The difference between how much buyers want to buy and sellers want to sell at a given price.
Shorting:	Selling borrowed stock in hopes of buying shares later at lower prices to pay it back
Small Cap:	Companies that have small market capitalization, which is the numberof shares issued by a company multiplied by its current share price.
Specialist:	A dealer in the New York stock Exchange who oversees the tradingof particular stocks.
Speculation:	To speculate means to take a risk. Speculation is usually referred toas short-term profit rather than long-term investment. There arethousands of stocks that do not provide income, nor do they have growth records. When such stock is purchased, a chance is taken that the company will become successful and the stock price will go up(possibly double or triple in price). For example, suppose that you had purchased stock in a bicycle company just before bicycles became popular; you might now be rich because you purchased stock at a time of low demand. So, speculation means prediction. If you are not good at predicting outcomes, there is a chance that you will lose some money with speculative stocks. The risks are great for investing in these types of stocks, but so are the rewards.
Spin-Off:	A company distributes stock in a division to shareholders, thereby forming a public company.
Spread:	The difference between a market maker's purchase and selling prices for a stock.
Stock Certificate:	The actual piece of paper that indicates stock ownership. A stockcertificate usually contains a watermark, a seal, and is patterned to make it hard to forge.
Stock Example: P/E:	Stock price compared to the "company earnings" per share (EPS)reported in ratio (i.e., profit divided by the number of shares outstanding). Low P/E - a better return on investment. Stock A Stock B* Price $10 $20 Earnings per share $2.00 $2.00 P/E Ratio 5 1.0 *Stock B is more expensive than Stock A in terms of earnings. For Stock B, you must pay $20 to earn $2, but for Stock A, you pay only $ 10 to earn $2.
Ratio Example:	P $1.00 1- PE Ratio* E $1.00 P $1.00 10 - PE Ratio E .100 P $ 1.00 100 - PE Ratio E .010 *The Ratio is the number of times greater the stock price is to the corporate earnings.
Stock Exchange:	The activity of buying and selling stock; a place where the buying andselling of stock takes place.
Stock Fund:	A mutual fund that invests in stocks. (Also called an equity fund.)
Stock Split:	A company splits its stock when it wants a greater number of investorsto buy its stock, effectively raising more money. To do this, companiesmust give each stockholder a certain number of shares for each sharethe stockholder owns. For example, in a two-for-one split,each sharealready valued at $100, becomes two shares for $50.00 each. This makes buying stock more affordable and encourages more people tobuy it. In a REVERSE split, the price of a single share goes up. As an example, an existing shareholder would get one share of stock at $9 for every three shares of $3 stock he holds in the company. This usually means fewer shareholders because a single share becomes more expensive. A reverse split gives a company greater control over its stock, because the company has fewer owners, the shareholders.
Stock Trust:	Name used for mutual-fand-type companies in the 1800's.
Stock:	Represents ownership in a company. When you buy a company's stock, you are buying a piece of it. The company takes the money you pay for your stock and uses it to run or grow the company. If all goes well, the company's performance improves and the value of your stock goes up. If not, the value goes down usually two kinds of stock are issued: common and preferred.
Stop Loss Order:	Standing instructions to one's broker to sell designated shares if their price falls below a given point.
Stop Profit Order:	Standing instructions to one's broker to sell designated shares if their price rises to a given profit target.
Strikes/Scandals:	A strike is the act of stopping work in order to receive better conditions such as higher wages and safer working conditions, whereas a scandal is an act that could result in a bad reputation for the firm. A firm's stability can often be affected by acts such as strikes and scandals.
Strong Hands:	Is a person or group, usually with a lot of money, that can buy stocks and hold on to them as they go up and down. Sometimes it is an advantage to do so because a growing company can go through a lot of ups and downs before it becomes profitable. Those who cannot afford to ride the ups and downs of a stock are said to have weak hands.
Supply:	The amounts of something companies want to sell at different possible prices.
Synergy:	Two businesses can earn more when combined as one company than their separate earnings added together.
Takeover Bids:	A takeover bid is an offer to buy controlling or full interest in a corporation through the purchase of voting shares of stock. One business buys another company. The purchased company keeps its name, but the buying business runs it as one of its divisions.
Technical Analysis:	Attempting to forecast the price of a stock by interpreting charts describing the price history of the stock in a particular market.
Ticker:	An online display of the latest stock prices.
Tombstone:	A newspaper advertisement for an underwriter's sale to the public of shares of stock, such as during an initial public offering.
Total User's Value:	Total User's Value (sometimes called Total Value) is the sum of your liquid cash plus the current value of your holdings.
Trademark:	The legal right to prevent competitors from using a special name, symbol, or slogan that identifies a product or company.
Trading Floor:	The common name for a stock exchange's trading area.
Trading Volume:	This figure shows the total number of shares traded for the day (listed in hundreds); thus "363" would mean 36,300 shares. When a 'Y' precedes the volume number of shares traded, the number is the actual shares traded. For example, "20" means 20 shares, not 2,000.Stocks with large volume surges compared with their usual range are usually underlined.
Trend:	A general upward or downward movement of the industry market.
Trust:	A group of businesses directed by a common board of trustees so that competition among the businesses is restricted.
Underwriter:	Acting as an intermediary between a company selling securities and the investing public.An investment banker that implements a public offering by guaranteeing the sale of shares to investors.
Unemployment:	Failure of the economy to fully employ its labor force. The unemployed are people in the civilian labor force who do not have jobs but are actively looking for work (one who is willing and able towork and who is actively seeking work). It is important to note whether unemployment is cyclical, frictional or structural.
Venture Capitalist:	Someone who invests in a new business that has recently started up and has demonstrated some chance of success but is still too small to go public.
Volume Traded:	The number of shares traded on a given day; also called Market Volume. This figure can indicate the mood of investors: Declining stock prices in a market where volume traded is high can indicate a bearish, downward market trend. Consistently high volume trading in a rising market usually signals investor optimism and a bullish trend.
Warrant:	The right to purchase shares at a stated price within a specified period of time.
Wrap Fee:	An annual management fee charged in lieu of commissions.
Write off:	An unusual reduction in the value of an asset on a company's books.
Yield:	A stock's current dividend divided by its current selling price.
Yield:	The annual rate of return on an investment, as paid in dividends or interest. Yield is calculated as a percentage of the amount invested.(dividend divided by selling price) Refers to investory profit or earnings.