Term
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Definition
| A brokerage account in which the broker lends the customer cash to purchase securities. The loan in the account is collateralized by the securities and cash. Allows the investor to borrow a percentage of the purchase price from the brokerage firm. |
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Term
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Definition
| Occurs when an investor establishes a position in a security by purchasing the security for their account. |
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Term
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Definition
| The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value. |
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Term
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Definition
| Type of order that limits the price at which an investor is willing to buy or sell and ensures that the investor will pay no more than the limit price on a buy or receive no less than the limit price on a sell. |
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Term
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Definition
| A type of order that is place at a specific price so that when that price is reached a market order is executed close to this point but not necessarily at the exact price specified. |
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Term
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Definition
| Type of broker that uses the internet to allow investors to have their own account, review the operating procedures and commission schedule, and initiate a trade. Usually these brokers trade at a discount to traditional exchanges. |
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Term
| Capital gain or loss (p.56) |
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Definition
| Gain or loss that occurs when an asset held for investment purposes is sold. |
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Term
| Dow Jones Industrial Average (DJIA, p.57) |
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Definition
| Market index that consists of 30 large industrial companies and is considered a "blue-chip" index. One of the most popular indexes. It is a price-weighted average. |
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Term
| Price-weighted average (p.59) |
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Definition
| Type of average in which each stock in the average is weighted by its price. Tend to give a higher weighting bias to high-price stocks than to low-price stocks. |
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Term
| Standard and Poor's 500 Stock Index (p.61) |
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Definition
| Index widely followed by professional money managers and security market researchers as a measure of broad stock market activity. The stocks in this index are equivalent to approximately 75 percent of the total value of the U.S. equities market. Is a value-weighted index. |
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Term
| Standard and Poor's 400 MidCap Index (p.61) |
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Definition
| Index composed of 400 middle-sized firms that have total market values between $200 million and $6.7 billion. |
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Term
| Standard and Poor's 600 SmallCap Index (p.61) |
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Definition
| Index that is composed of 600 small cap stocks. Used for comparison of stocks that are smaller than the MidCap. |
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Term
| Standard and Poor's 1500 Stock Index (p.61) |
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Definition
| Index that combines the S&P 500, the S&P 400 MidCap, and the S&P SmallCap 600. |
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Term
| Standard and Poor's 100 Index (p.61) |
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Definition
| Index composed of 100 blue-chip stocks on which the Chicago Board Options Exchange has individual option contracts. |
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Term
| Value Line Average (p.63) |
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Definition
| Average that represents 1,700 companies from the New York and American stock exchanges and the Nasdaq market. Is an equal-weighted index. |
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Term
| Equal-weighted index (p.63) |
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Definition
| Index that is weighted equally between each stock. |
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Term
| Value-weighted index (p.63) |
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Definition
| Index in which each company is weighted in the index by its own total market value as a percentage of the total market value for all firms. |
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Term
| Wilshire 5000 Equity Index (p.64) |
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Definition
| The most comprehensive index and represents the total dollar volume of all U.S. equity issues with readily available price data from the NYSE, AMEX, and Nasdaq stock markets. |
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Term
| American Exchange Composite Index (AMEX, p.64) |
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Definition
| Index composed of all stocks trading on the American Stock Exchange. |
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Term
| Russell 1000 Index (p.65) |
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Definition
| Index that includes only the largest 1,000 firms out of the Russel 3000. |
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Term
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Definition
| Index that includes only the smallest 2,000 out of the Russell 3000. |
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Term
| Russell 3000 Index (p.64) |
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Definition
| Index that comprises 3,000 U.S. stocks as measured by market capitalization (market value times shares outstanding). |
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Term
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Definition
| Index that covers the performance of all the world's markets combined. |
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Term
| Tokyo Nikkei Stock Average (p.66) |
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Definition
| Japan's primary stock index. |
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