Review Sheet – Chapter 11

Things to Compare

Characteristics of Characteristics of Name Similarities Differences First Second

Spending vs. Saving

Risk vs. Reward

Common stock vs. Preferred stock

Price- weighted index vs. market- weighted index

Dow Jones vs. S&P 500

Stock vs. Bond

Bull vs. Bear

Dividend vs. Bond Interest High beta vs. low beta

SOME Vocabulary

Beta Stock market index Yield

Common stock Outperform Maturity

Preferred Stock Underperform Default

Stock exchange Equity security Treasury

Ticker symbol Coupon Market index

Questions to Answer

1. Why would an investor pick bonds over stocks?

2. What causes stock prices to move?

3. What are market indexes used for?

4. Why do companies care about their stock price?