Terms & Formulas
Name the 3 main financial statements
Income Statement
Balance Sheet
Cash Flow Statement
What does DJIA stand for?
Dow Jones Industrial Average
What do investors expect in return for taking high risks?
A larger return from their investments
What is it known as when investors sell a security with the intent of buying back the security at a lower price?
What nation, as of January 31st, has officially left the European Union?
Britain, or United Kingdom
What does DCF stand for?
Discounted Cash Flow
What US-based security is typically used as the benchmark "risk-free" rate?
Treasury Bill, or Treasury Bond
Capital gains and losses are what?
A measurement of how far the value of an asset or investment deviates from its original price.
What is a bull and bear market?
Bull Market: A financial market of a group of securities where the securities are on the rise, or expected to increase in value.
Bear Market: The direct opposite; a market in decline.
This state-owned company recently had an IPO, quickly surpassing a $2 trillion valuation on its second day of trading.
Saudi Aramco
On a loan, what are the restrictions the lender places on the borrower called?
Debt covenant
This market index measures the performance of the 500 largest companies listed on the stock market in the United States.
S&P 500
What does it mean to be liquid?
Assets that are easy to trade
What does NASDAQ stand for?
National Association of Security Dealers Automated Quotation System
What company, once valued as high as $47 billion, has announced a new CEO after its failed IPO?
WeWork
EBIT*(1 - tax rate) + Depreciation/Amortization - Change in Net Working Capital - Capital Expenditure
Federal Funds Rate, or Fed Funds Rate
What is amortization the process of?
Paying off debt in regular installments over a fixed period of time.
What is hedging?
A risk management strategy that utilizes financial instruments or market strategies to limit potential losses in investments.
What tech company, famous for its three-lettered company name, recently announced a new CEO?
IBM
Formula for WACC
Cost of Equity*E/(E+D) + Cost of Debt*(1 - tax rate)*D/(E+D)
What index is a popular measure of market volatility? (Hint: password for Stock Market Challenge)
From most important to least important, what is the order in which companies pay their stakeholders when they declare bankruptcy?
Bondholders, preferred stockholders, stockholders
Bondholders, preferred stockholders, stockholders
What is an underwriter?
An investment bank that works with the issuer to determine share price, buys the security from the issuer, and sells the security to investors.
What two automakers have agreed to a merger valued at $50 billion?
Fiat Chrysler Automobiles & PSA Group