BUA 101 Chapter Notes - Chapter 17: Mutual Fund, Common Stock, Corporate Bond
3 Nov 2016
School
Department
Course
Professor
Matthew Stenger
Chapter 17 Outline
September 26, 2016
I. Maximizing Capital Growth
a. Time value of money
i. Principle that invested money grows over time, by earning interest or
some other form of return.
b. Compound growth
i. Compounding of interest over time, with each additional time period
accumulating even more interest
ii. Rule of 72
1. Take the percent interest each year, divide by 72
2. This is how long it takes your investment to double
c. Common stock investments
i. Stock
1. Portion of ownership of a corporation
ii. Common stock
1. Most basic form of ownership, including voting rights on major
issues, in a company
a. Market value
i. Current price of a share of stock in the stock
market
b. Book value
i. Value of a oo stok epessed as the fi’s
oes’ euit diided the ue of oo
shares.
iii. Dividend
1. Payment to shareholders, on a per-share basis, out of the
opa’s eaigs.
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iv. Blue-chip stock
1. Common stock issued by a well-established and respected
company with a sound financial history and a stable pattern of
dividend handouts.
d. Investing to Fulfill Financial Objectives
i. Mutual fund
1. Company that pools cash investments from individuals and
organizations to purchase a portfolio of stocks, bonds, or other
securities
ii. No-Load fund
1. Mutual fund in which investors pay no commissions when they
buy in or sell out.
iii. Load fund
1. Mutual fund in which investors are charged sales commissions
when they buy in or sell out.
e. Why to invest in a mutual fund
i. Stability and safety
1. Money market mutual funds
ii. Conservative capital growth
1. Long term municipal bonds, corporate bonds, common stock.
iii. Aggressive growth
f. Exchange-Traded Funds (ETF)
i. Bundle of stocks or bonds that are in an index that tracks the overall
movement of a market but unlike a mutual fund can be traded like a
stock.
II. The Business of Trading Securities
a. Securities
i. Stocks, bonds, and mutual funds representing secured, or asset based
claims by investors against issuers.
find more resources at oneclass.com
find more resources at oneclass.com
