Securities Markets financial market places for investments help find long term funding and buying and selling buy securities for companies and individuals sell them NASDAQ uses automated system for trading Primary Markets sale of new securities Corps only make money 1st time they sell stock Secondary Markets handles trading of investments between investors Investment bankers specialists who assist in issuing and selling of securities underwriting buys entire stocks or bonds at discount and resells for full price institutional investors investors who invest in investments pensions mutual funds insurance companies OTC Market means to trade stocks not listed on large securities exchanges Takes place between 2 parties directly not like NYSE Euronext Prospectus a economic and financial info a company must file with the SEC pre IPO Common Stock if only issuing one stock must be common owners have right to elect board of directors share in the firms profits through dividends Have Preferred gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholder if the company is forced out of SEC regulating various stock exchanges preemptive right to purchase new shares before the public business and has its assets sold No voting rights callable prefered can be required to resell to company Fixed dividends callable could be required to sell shares back to corporation can be transferred to common cumulative dividends can accumulate and be paid to owners before common Bonds rated by risk interest is tax deductible coupon rate interest rate debenture bonds unsecured bonds sinking funds a reserve account to pay for bond interests create orderly repayment reduce risk callable bond permits the issuer to pay off principal before maturity convertible bonds can be converted into common stock junk high risk bonds high interest pay interest as long as the value of a companies assets remain high and has cash flow become junk when the company fails gov bonds are safest investment corporate bonds do not have to be held until the maturity date can sell at discount or at a premium as interest increases bond prices fall Index fund focus s on a specific sector Investment risk chance you loose money yield expected return on an investment usual over a period of a year duration length of time money is committed to an investment liquidity how easy it is to turn back to cash tax consequences Stocks blue chip stocks highest value regular dividends grow buying on margin borrowing some money for purchase of stocks increase risk return margin is portion of stocks purchase price that investors must pay with own money income stocks stocks of public utilities that pay high dividends that keeps pace with inflation NADSDAQ telecommunication network that links dealers and seller together across the nation limit order an order to buy a stock at a specific price par value price of a stock that is assigned by the corporation no par value stocks do not reflect market price Mutual funds load fund charges a commission to buy or sell shares closed end funds limits how many shares can be sold buys stocks bonds and other investments and sells shares in those securities to the public ETFs collections of stocks bonds and other investments that are traded on exchanges but are traded more like individual stocks Program trading automatic cut off that computers sell curb circuit breakers closes the market when dow falls 10 20 or 30 in a day market order tells a stock holder to buy or sell a stock immediately at the best possible price stocks are traded on a stock exchange bull a good market board of governors sets margin rates secured bonds mortgage bonds