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What is Descriptive Information?
Presents factual data on the past behavior of the economy, market, industry, company, or given investment.
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What is Analytical Information?
Presents projections and recommendations about potential investments based on available current data.
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What are the Types of Information?
- 1.Economic and Current Event Information: Background and forecast data related to economic, political, and social trends.
- 2.Industry and Company Info: Background and forecast data on specific industries and companies.
- 3.Info on Alternative Investment Vehicles: Background and forecast data for securities other than stocks, bonds, and cash.
- 4.Price Info: Price quotes on investment securities.
- 5.Info on Personal Investment Strategies: Recommendations on investment strategies, or specific purchase or sale recommendations.
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What are Averages and Indexes?
- Averages: reflect the arithmetic average price behavior of a representative group of stocks at a given point in time.
- Indexes: measure the current price behavior of representative group of stocks in relation to a base value set at an earlier point in time.
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Calculation of DIJA:
=(Closing share price of Stock 1 + Closing Share Price of Stock 2 + ... + Closing Share Price of Stock 30)/DIJA Divisor
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What is a Bond Yield?
- Return an investor would receive on a bond if it were purchased and held to maturity.
- Reported on Annual Basis.
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What are Stockbrokers and what do they do?
- Act as an intermediate between buyers and sellers of securities.
- Typically charge a commission to facilitate these securities transactions.
- Must be licensed by both SEC and securities exchanges on which they place orders.
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What are Full-Service Brokers?
- Traditional Broker.
- Offers investors a full array of brokerage services: providing investment advice and infor, holding securities in street name, offering online brokerage services, and extending marginal loans.
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What are Premium Discount Brokers?
- Focus primarily on making transactions for customers.
- Charge low commissions and provide limited free research infoand investment advice.
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What are Basic Discount Brokers?
- Called online brokers or electronic brokers.
- Typically deep-discount brokers through which investors can execute trades electronically online via a commercial service.
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Types of Accounts:
- 1.Single/Joint: Account either single or joint. Joint accounts most common between husband and wife or parent/child. Account of minor is called Custodial Account, parent or guardian must be part of all accounts.
- 2.Cash/Margin: Cash - one which customer can only make cash transactions. Margin - account in which firm extends borrowing privileges to a creditworthy customer.
- 3.Wrap: Allows customers with large portfolios to shift stock selection decisions conveniently to a professional money manager.
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Types of Orders:
- 1.Market: Order to buy/sell stock at best price available at the time the investor places the order.
- 2.Limit: Order to buy at or below a specified price or to sell at or above a specified price.
- 3.Stop-Loss: Broker tells market maker to sell stock when market price reaches or drops below a specified level.
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