Basis Points (BPS)
A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form.
Blue-Chip Stocks
Shares of very large and well-recognized companies with a long history of sound financial performance. Most companies in the Dow Jones Industrial Average (DJIA) are considered blue-chip stocks due to their market leadership and stability.
Dividend Yield
A financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It is calculated by dividing the annual dividend per share by the current share price.
Earnings Per Share (EPS)
A company's net profit divided by the number of common shares it has outstanding. EPS serves as an indicator of a company's profitability and is a key metric used in stock valuation.
Market Capitalization
The total market value of a company's outstanding shares of stock. It is calculated by multiplying the current market price of one share by the total number of outstanding shares.
Price-to-Earnings (P/E) Ratio
A ratio for valuing a company that measures its current share price relative to its per-share earnings. It helps investors determine if a stock is overvalued or undervalued compared to its peers.
Volatility
A statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security.