Stock Market Test

Stock Market Test
40 Questions
NAME :
DATE :
1. What are the two general types of stocks? CHOOSE TWO
A Deferred B Common
C Preferred D Certificate of Deposit

2. An index that measures the average health of 30 large, publicly owned, US companies is called the…?
A Guess Again Index B The S&P 500
C Bob Johnson’s Index D Dow Jones Industrial Average (DJIA)

3. Which of the following best describes diversification?
A putting all your investments in two
financial investments
B reducing risk by investing in different
types of securities
C investing in different types of bonds
D Avoiding risk by investing in blue-chip
stocks

4. Not all companies offer dividends.
A false B true

5. The two major stock exchanges are
A Dow Jones Industrial Average & S&P 500 B NASDAQ & DJIA
C NASDAQ & NYSE D NYSE & American

6.
What is a stock market crash?
A when one or two stocks drop signifiicantly B rapid but anticipated drop in stock prices
C rapid and unanticipated drop in stock
prices
D slow decrease in stock prices over a year

7. The DOW Jones Industrial Average is an index of 30 American companies. Why is the DOW Jones Industrial Average important?
A It provides a snapshot of how the stock
market and the US economy is doing.
B It tells Americans how many jobs are out
there.
C It tells Americans how much debt the
country is in.
D It helps economists predict when a stock
market crash will happen.

8. What is the stock market?
A
A type of bank that gives out loans to new
businesses.
B
A special type of grocery store that sells
stocks.
C
A type of farmers market where people
buy and sell food.
D
A place where parts of businesses are
bought and sold.

9. The group of stocks that you own is called a
A portfolio B commission
C dividend

10.
A sum of money paid to shareholders of a corporation out of its
earnings.
A index B invest
C dividend D profit

11. If a business wants to raise capital but not create debt, it can
A float a bond issue B issue common stock
C borrow money from a commercial bank D borrow money from the government

12. IPO stands for
A Itemized Public Organization B Initial Public Offering
C Imminent Profitable Option D Initial Primary Offering

13. The Dow Jones Industrial Average is an example of
A A Stock Market Performance Index B a Stock Market Exchange
C a Brokerage Firm D a Mutual Fund

14. A time when stock prices are RISING is called
A bull market B transaction
C bear market

15. The NYSE and NASDAQ are forms of ________________ where people trade stocks.
A businesses B mutual funds
C stock exchanges D large shopping centers

16.
A group of large companies that stockbrokers look at to gauge how
the market is doing as a whole.
A industry B shareholder
C portfolio D index

17. The current price of one share of stock is called
A Ask B Bid
C Last D Open

18. Which of the following is NOT a stock index?
A P/E RATIO B DOW JONES
C NASDAQ COMPOSITE D S & P 500

19. When the market takes a downhill turn and prices are decreasing
A Bear B No such term
C Bull D Bronco

20. Can interest rates affect the stock market?
A YES B NO

21. A corporation “goes public” when it ___________________.
A has a big party and invites all its investors. B gives out its first dividend.
C becomes an entity. D first issues stock to investors to buy.

22. As long as you are 18 years old and have some money, you can invest it in the stock market.
A True B False

23. The name for a part of a business that is bought and sold on the stock market is:
A Share B Part
C Stocker D Marker

24. Why would a company need to issue stock?
A To raise money. B To show customers that it’s successful.
C To stop the government from regulating it. D To increase its’ customer base.

25. How do you make money buying stocks?
A
You sell it for a higher price than you
bought it for.
B
If you hold on to it as long as possible it
will gain in value.
C
The DOW ratings determine which stocks
will pay out.

26. What does NASDAQ stand for?
A
National Application of Securities Dealers
Automatic Quotations
B
Nominal Association of Securities Dealers
Automatic Quotations
C
New Association of Securities Dealers
Automatic Quotations
D
National Association of Securities Dealers
Automatic Quotations

27. People who own stocks are guaranteed a return on the money they have invested in stocks.
A TRUE B FALSE

28. What is the name of the most well know stock exchange?
A The Louvre B The New York Stock Exchange (NYSE)
C The Boston Stock Exchange D The Imperial Stock Exchange

29.
The possibility of losing some or all of a particiular investment.
A profit B risk
C industry D index

30.
A stock market crash can be brought on by
A economic crisis B major catastrophic event
C collapse of a stock bubble D all of these

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

32. Do more or fewer people invest in the stock market when interest rates go up?
A FEWER B MORE

33. A company owned by families or a small number of investors and do not issue stock to the
public.
A portfolio B industry
C private company D public company

34. Not having all your stocks in one industry (airlines, food, etc) is called
A Diversifying B Directing
C Trading D Portfolio

35. Explain what an IPO is.
A
It’s when a company goes ‘public’ and
offers its stock for sale for the first time.
B
It’s when a company buys back a lot of its
stock to gain control of the company.
C
It’s when another company buys a lot of
stock in another company to take it over.

36. A Neon Oil Corporation tanker spilled oil in the ocean around Australia. As a result of this
accident, the share price of this stock is likely to
A
increase
B
not be affected and remain about the
same
C fluctuate D decrease

37. How does a bear stock market impact the U.S. economy?
A
Consumers will purchase more vacation
homes.
B
Americans will invest more money in the
stock market.
C
Americans will invest less money in the
stock market.
D
Consumers will purchase more large
appliances.

38. When you own stock in a company,
A you are part owner. B you are the CEO.
C
you are entitled to a dividend.
D
you are involved in day to day
management.

39. The number of shares that have been traded in the current or most recent trading session is
called
A Previous Close B Dividend
C
Last
Last
D
Volume

40. The highest price the stock has traded over the past year is called
A
Market Cap
Market Cap
B
Day High
C 52 Week High D Beta

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

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