Introduction to the Stock Market

Introduction to the Stock Market

48 Questions

1. EPS x (times) Shares Outstanding = a company’s total ________
A Profits B Sales
C Dividends D Market Capitalization

2. In a 2-for-1 stock split, the price of the stock is
A doubles B falling
C cut in half D not affected

3. What is a bond?
A a building on wall street
B lending money to a company for a fixed interest payment
C an investment that cannot be traded
D a share of ownership in a company

4. A dividend is a portion of the company’s profits paid to its shareholders.
A True B False

5. What is an IPO?
A when a company first sells stock to the public
B a new Apple product
C when the company’s shareholders have a meeting
D when the government creates shares on the stock exchange

6. For a company to exist for the long term what must it continue to do?
A Provide for customers B Produce a product or a service
C Make a profit D Help the economy to grow

7. interest calculated at regular intervals solely on principal
A Simple Interest B Compound Interest
8. What is a mutual fund?
A a fund that follows an index like a stock B a type of high interest bank account
C a pool of securities you can buy as an investment
D a fund used by companies to raise capital

9. The last closing price of a stock divided by the last 12 months earning per share is
A Dividend Yield B Debt to Asset Ratio
C Earnings /Share D P/E

10. The price paid for the first share of stock in a trading session is
A Last B Bid
C Open D Change

11. Mutual funds are:
A usually less risky than investing in a money market
B an investment that holds a wide range of different investment instruments, providing diversification
C guaranteed to increase in value
D an investment portfolio managed by the investor

A $13.31 B $1.24
C $1.95 D $0.90

13. Which of the following is your right as a shareholder of common stock?
A the right to dividends if paid B the right to hire officers of the corporation

14. What are 2 ways you can make money in stock market
A Use all of your money to buy stocks
B Do research and invest in stocks that do well
C be aware somebody will make you do that D Buy what everyone else is buying

15. If a company issues dividends, preferred stock holders are paid the dividends first.
A True B False

16. Typically, stocks are a good invest for the average person over a long period of time.
A True B False

17. A _____ is a list of the securities, including stocks, mutual funds, and cash that you own.
A folder B notebook
C collection D Portfolio

18. What does EPS stand for?
A Earnings People’s Share B Earnings Per Share
C Earnings Price Share D Earnings Profit Share

19. In short selling, you first ___ the stock.
A buy B split
C hold D sell

20. _____ stock is the name applied to the stock of large, well-known, well-established companies
with good reputations.
A Dip and chip B Paint chip
C Chocolate chip D Blue chip

21. What is a another word for earnings?
A Dividends B Profits
C Stocks D Shares

22. What is Capitol gain?
A The gain of money a Capitol city gets B Short selling
C The amount a company gets that year D The increase in the value of the stock

23. What is the goal of an investor?
A Buy low and sell high B Keep a stock for their entire life
C Open a new investment account D Help a company get bigger

24. What is the Bull market
A When the stock market trends downward B This is when the bull owns the market
C The place where you buy bulls for bull fights
D When the stock market trends upward

25. Publicly held corporations
A are listed first on the New York Stock Exchange
B guarantee a positive return to investors
C are not-for-profit organizations
D have shares of stock that are held by public (outside) investors

26. Why should an investor diversify?
A promises growth in your investments B lets customers spend more
C gives a company more options D spreads the risk taken by a shareholder

27. Dividends
A The money a company makes each year
B The part of the corporations profit paid to stockholders
C How much money the owner makes
D The answer could be any one of these have fun

28. What is the primary reason why companies issue stocks?
A To ensure a stable market B To raise extra money for the company
C To guarantee the success of a new product
D To provide for their employee’s retirements

A $ 0.62 B $ 2.50
C $ 1.95 D $ 0.55

30. What is Leverage?
A The average growth of a stock each year B A rise in the general level of prices
C Prying open a door with a crowbar
D The use of borrowed money to buy securities

31. What is a Bear Market?
A when the stock market trends upward B answer the question see if you are correct
C When the stock market trends Downward D A place where you sell bears downtown

32. Yield of the stock based on last price. Figured by dividing the yearly dividend by the last price.
A Change B Dividend
C Dividend Yield D Previous Close

33. What is Common Stock
A Stock that the common people buy B leaves of corn that look alike
C variable dividend but no voting rights
D A type of stock that pays a variable dividend. Gives holder voting rights

34. What are preferred stocks
A Stocks that most people prefer
B A type of stock that pays a fixed dividend and carries no voting rights
C Stocks that make millions

35. People who invest in the stock market will automatically make money.
A False B True

36. What are stock shares?
A Certificate showing a company’s income
B Certificate showing a company’s retirement system
C Certificate showing a company’s dividends
D Certificate showing partial ownership of a company

37. Shares Outstanding x Last Trade = _________
A Sales B Profits
C Market Capitalization D Earnings

38. Common stock is more prone to rapid changes; therefore, there is more risk associated.
A True B False

39. Publicly held corporations
A are not-for-profit organizations
B have shares of stock that are held by public (outside) investors
C are listed first on the New York Stock Exchange
D guarantee a positive return to investors

40. What does a stock represent?
A a contract for a company’s goods and services
B a percentage of ownership of a company
C a loan you make to a company D stocks are just tools used to make money

41. What is NASDAQ?
A Certificates certifying you own a stock
B What stocks are called when they are bought and sold
C The biggest stock market in the world D An automated system for trading stocks

42. How do people make money investing in bonds?
A Selling a bond for more than you paid B Give them $100
C Take the money from the bond people D James Bond

43. The NYSE is an exchange where daily auctions (the biding of stocks) determine the price for thousands of different stocks.
A False B True

What is a stock?
A A person who buys things for you
B A document that represents ownership in a company
C A document that states you are worth a lot of money
D A part of a share of showing profit in a company

Does Home Depot pay a dividend? See quote behind the questions.
A Yes B No

46. If a bond is held to maturity, the investor will receive an amount stated on the bond known
as the _______.
A face value B maturation value
C printed value D ticket value

47. Stocks are a share of ownership in a company and a person who owns one or more shares of stock is called a …
A Broker B Dividend
C Securities D Stock Holder

National Association of Securities Dealers Automated Quotations, or NASDAQ,
A uses stockbrokers in conjunction with the Dow to make trades
B uses a computer automated system for trading
C uses ebay to help make the trades D uses the same trading system as the NYSE.

Answer Key
1. a 2. c 3. b 4. a
5. a 6. c 7. a 8. c
9. d 10. c 11. b 12. d
13. a 14. b 15. a 16. a
17. d 18. b 19. d 20. d
21. b 22. d 23. a 24. d
25. d 26. d 27. b 28. b
29. b 30. d 31. c 32. c
33. d 34. b 35. a 36. d
37. c 38. a 39. b 40. b
41. d 42. a 43. b 44. b
45. a 46. a 47. d 48. b

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