Midterm 2nd Topic

• Stocks represents the shares of ownerships (equity) of a (publicly traded) corporation- thus stockholders become partial owners of the company
• In stocks The IPO (Initial Public Offering) when a corporation goes public, i.e starts selling stocks
• types of shares to invest on in stocks

  • Common stock- High risk, high return depending on the stock market fluctuations.
  • Preferred stock-usually fixed returns, thus low risk low return
• Type of securities investment is stocks
• When a business decideds to be listed in the public stock market then its first step is that it should establish its IPO (Initial Public Offering)
• Stocks Terminologies

  • Stock Price: Purchase and selling price of stocks
  • Stock Volume: Number of Shares of Stock
  • Stock Value : Currency value of shares of stock
  • Dividends: Earnings of the company shared to stock holders
• In stocks: Trading ( to the buying and selling) tips

  • Review performance of the company thru financial statements {the balance sheet, income statement, cash flow statement} and interpreting financial ratios.
  • Short term or long term
  • Diversifies portfolio by investing in different companies (can acquire the service of a stock broker)
• STOCKS:Formula for growth rate or percent change

  Formula

  
• STOCKS: formula for stock value

  Formula

  
• STOCKS: Formula for stock earnings

  Formula

  
• STOCKS: Formula for dividends

  Formula

  
• PIE RATIO is also known as the price to earnings ratio

  • high could mean overvalued a lot or good earnings
  • low means that the stock is not popular or earnings could be low
  • negative usually means no earnings and not displayed
• in stocks: Dividend yield

  • High- earnings are high and/or company pays high dividends
  • low means that the earnings are low or company pays low dividends
• Bonds refers to the securities sold (issued) by corporations, financial institutions, or government to interested investors (bondholders)
• Bonds refers to the enterprises sell bonds to interested investors , they are actually borrowing money from the bondholders.
• The common features of bonds are:

  • Face Value (Par Value)- prince of bond at initial purchase;amount to be returned upon maturity of the bond.
  • Coupon- interest paid once or several times a year until maturity.
• Bondholders may sell prior to maturity which is

  Returns=F + I-P
• Face value is amount get in the future also known as future value, accumulated value, etc
• Mutual funds refers to the fund setup by investment companies or are investment companies themselves

  they are funds that invests in a strategic mix of stocks, bonds, money and market.
• Mutual funds are usually maintained by investment managers who are paid based on earnings of the fund- earnings are somehow guaranteed
• In mutual funds, large amounts of investments are usually required
• In mutual funds, the NAVPS means Net asset value per share
• Credit Card: Example of networks in credit card networks are network of payments such as visa, mastercard, american express, discovers
• Credit limit refers to the maximum loanable amount
• memebership fee is the annual or monthly payment to credit cards
• Interest rate refers to the monthly such as 2.35% per month etc
• Finance charges and fees are the monthly interest, late charges, over limit fees, etc
• Total amount due is the balance plus purchases plus fees
• balance due is the total amount due plus interest
• Minimum payment due is usually done per month
• Cash advance is the withdrawing money from your credit limit (interest fixed surcharges)
• Bank accounts- used for safekeeping personal cash and earn minimal interests
• Bank deposits are instruments for banks to acquire business capital and pr further investment
• Common types of bank accounts are

  Savings account

  Checking or current account

  Time deposits

  Hybrid accounts
• In bank accounts there are premium depositors which are eligible to personal loans car loans housing loans mortgage etc
• ADB- Average daily balance
• Other types of bank accounts are money market accounts which are all in one saving current and time deposits thats commonly offered by international banks seldom by local banks
• Money market accounts has a minimum deposits or ADB of 100K pesos
• Money market account and Foreign market accounts has cash access thru otc passbook, chequebook, atm, online
• In money market accounts, interests is tiered to the ADB