Understanding Industries Part 2 Security Market Productivity Learning Objectives Define what a stock is, how to read stock quotations Explain how an investor makes a return on stocks. Explain how stocks are traded. Find and interpret a stock quote using a financial website
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Legal entity that is owned by stockholders who have limited liability in debts of the corporation.
Why do corporate firms issue stock?
IPOs The first sale of stock by a private company to the public.
Frequently serve as barometers of overall confidence of business conditions.
Oldest and most well-known stock index.
Covers 30 very large companies.
Price-weighted index so the stock with the highest price (IBM) has the most influence.
A composite of the stock values of 30 large industrial firms. The most widely recognized indicator. 30 large and actively traded industrial stocks.
500 largest stocks
Market value-weighted index. GE, Exxon Mobil, Microsoft, Citigroup, and Pfizer are the largest companies
Used as an index for large companies
A broader measure of the market than the DJIA. Uses more stocks (400 industrials, 2 transportation, 40 utilities, 40 financial) and yields different results.
A composite of textile/apparel industry stocks.
Rising: bull-market (public confidence)
Falling: bear-market (lack of confidence)
The advances and declines of the Dow are given in points.