Chapter 2

  1. Primary Market
    Market for new securities sold to investors for the first time to raise capital for the issuer.
  2. Secondary Market
    Stock exchange where investors trade stocks with each other.
  3. New York Stock Exchange (NYSE)
    Largest stock market in terms of market capitalization.
  4. Agency Auction Market
    Market in which brokers represent buyers and sellers and prices are determined by supply and demand.
  5. Specialist
    Employee of a NYSE firm who manages the market for an individual stock.
  6. Round Lot
  7. America Stock Exchange (Amex)
    Nation's second largest stock exchange.
  8. Public Float
    Common stock held by unaffiliated institutional and individual investors.
  9. Nasdaq Stock Market
    Largest organized equities market by trading volume and number of listed companies.
  10. Negotiated Market
    Price determination through bargaining.
  11. Market Maker
    Member firm that uses its own capital to trade and hold an inventory of NASD stock.
  12. Customer Order Flow
    Customer buy and sell activity.
  13. Market Maker Spread
    Difference between bid and ask prices.
  14. Inside Market
    Highest bid and lowest offer prices.
  15. Nasdaq Capital Market
    Market for smaller companies that trade prior to full listing on the Nasdaq national market.
  16. Penny Stock
    Equity priced below $1.
  17. OTC Bulletin Board (OTCBB)
    Regulated quotation service for very small Over-The-Counter equity securities.
  18. America Depositary Receipts (ADR)
    Coupons that signify ownership of foreign stocks.
  19. Dow Jones Industrial Average (DJIA)
    Price-weighted index of 30 large, industrial leading stocks.
  20. DJIA Divisor
    Adjustment factor used to account for stock splits.
  21. S&P 500 Index
    Popular value-weighted market index.
  22. Equity Benchmark
    Performance standard to be evaluated against.
  23. Russell 3000 Index
    Market capitalization index for the 3,000 largest U.S. companies (98 percent of U.S. market cap).
  24. Dow Jones Wilshire 5000 Composite Index
    Total dollar value of the U.S. equity market (in billions of dollars).
  25. Russell 1000 Index
    Market capitalization index for the 1,000 largest U.S. companies (90 percent of U.S. market cap).
  26. Nasdaq Composite Index
    Market value weighted index of all 5,000+ stocks listed on the Nasdaq Stock Market.
  27. Nasdaq 100 Index
    Market capitalization weighted index of Nasdaq's largest companies.
  28. Dow Jones Wilshire 4500 Completion Index
    Market cap index of Dow Jones Wilshire (5000) index companies minus the S&P 500.
  29. S&P MidCap 400 Index
    Market cap index for 400 medium sized domestic stocks.
  30. Russell 2000 Index
    Small company stock price index for the 2,000 smallest companies in the Russell 3000 index.
  31. S&P SmallCap 600 Index
    Market cap weighted index of 600 small domestic stocks.
  32. Nikkei 225 Index
    Leading measure of the Japanese stock market.
  33. FTSE-100 (Footsie)
    Capitalization weighted index of the 100 top companies on the London Stock Exchange.
  34. TSE-35
    Market basket of 35 blue-chip Canadian companies.
  35. Hang Seng Index
    Market cap weighted measure of Hong Kong stocks.
  36. Europe, Austalasia, Far East (EAFE) Index
    Leading global stock index stocks from 21 countries.
  37. Emerging Market
    Stock market in a developing nation.
  38. Developed Market
    Stock market in mature countries.
  39. Sarbanes-Oxley Act
    Law instituting public accounting reforms and investor protections.
  40. Self Regulatory Organizations (SROs)
    Industry group with oversight authority granted by the SEC.
  41. National Association of Securities Dealers (NASD), Inc.
    A self-regulatory organization of the securities industry.
  42. StockWatch
    Computerized system that flags unusual volume or price changes.
  43. Intermarket Surveillance Group
    Coordinated effort to detect cross-market manipulative trading.
  44. Securities Arbitration
    Private form of dispute resolution with binding outcomes.
  45. Circuit Breakers
    Rules for halting securities trading in volatile markets.
Card Set
Chapter 2
Chapter 2