Stock Market : Questions and Answer Key

60 Questions

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

2. You can buy stock in any company in the world.
A True, all companies are required to offer stock.
B False, a company is only listed on the stock exchange if it wants to be.

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

4. A time when stock prices are falling
A transaction B bull market
C bear market

5. A legally established company
A corporation B capitalism
C colony

6. Money needed to start a business is called
A Clams B Profit
C Capital D Loan

7. Apple is releasing a new iPhone that is predicted to change the cell phone world. Millions of people have pre-ordered it. What do you think will happen to their stock?
A It is likely to go up. B It is likely to go down.

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

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

10. You have $250 that you are willing to invest in Apple’s stock. If Apple’s stock is selling for $113.05 a share, how many shares could you buy?
A 1 B 2
C 3 D 4

A measure of volatility in stock prices of a particular company.
A P/E ratio B earnings per share
C volume D beta

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

13. What types of stocks have dividends?
A preferred stock B chicken stock
C common stock D premium stock

A company’s closing price divided by its latest annual earnings per share.
A beta B market capitalization
C volume D P/E ratio

A particular market where stocks and bonds are traded.
A portfolio B shareholder
C stock market D market capitalization

16. The price a stockbroker charges to take care of buying and selling stocks
A profit B dividend
C commission

17. to buy a variety of stocks
A risk B diversify
C portfolio D profit

A company’s profit or earnings divided equally among all the shares investors own.
A earnings per share B market capitalization
C industry D volume

The financial benefit when the revenue of a company exceeds expenses, costs, and taxes.
A profit B portfolio
C loss D volume
20. Over the course of the day, the head of Apple’s company is imprisoned for not paying his taxes. What do you think will happen to Apple’s stock?
A It will go down. B It will go up.

21. A person who is licensed to buy and sell stock
A stockbroker B shareholder
C investor

22. Apple stock plummets and now you have to decide if you hold onto your stock in the hopes that it goes back up, or sell it at a loss. Apple stock is now selling or $54.76 a share. You have 2 shares. When you first bought them their total value was $226.10. What is their total value now?
A 557.22 B 22.10
C 5.05 D 109.52

23. One way stockholders make money is by selling their stock for more money than they paid for it.

The highest price and lowest price of a stock over a 52 week period.
A 52 week range B profit
C beta D volume

How much did IBM’s stock vary that day?
A $8.00 B $165.05
C $3.20 D $5.70

You decide that you want to invest a little bit of money in Apple stock. But in order to do that you need to figure out their stock symbol. What is the symbol that Apple uses on the stock market? Use the image to help you figure it out.

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

28. People who own stocks are guaranteed a return on the money they have invested in stocks.

29. What type of stock would have voting rights?
A preferred stock B chicken stock
C common stock D stock stock

A holder or owner of stock in a company or corporation.
A portfolio B shareholder
C industry D stock market

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

32. Stocks represent ownership in a corporation.

A company that sells stock on the stock market.
A public company B market capitalization
C private company D stock market

How much did yahoo vary during the year?
A $4.51 B $7.68
C $3.17 D $76.80

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

To put money to use by purchasing something offering potential profitable returns as interest, income, or appreciation in value.
A invest B stock
C index D portfolio

Groups of companies that are related based on their primary products or services.
A public company B industry
C index D stock

38. an exchange of goods, services, or money
A transaction B diversify
C profit

The total current market value of all outstanding shares of a company.
A beta B dividend
C market capitalization D volume

What was the lowest dollar amount Yahoo was traded for that day?
A $5.43 B $4352.00
C $7.27 D $6.08

How much profit did Nike make that day per share?
A $84.50 B $84.00
C $0.75 D $.0075

When assets or stocks are sold for a price lower than the original purchase price.
A volume B profit
C risk D loss

43. someone who lends or gives money in hopes of making a profit
A investor B stockbrocker
C portfolio D shareholder

44. What is it called when the stock market rises for a period of time?
A growth market B stock market
C bear market D bull market

The total holdings of stock by a financial institution or a private investor.
A industry B portfolio
C index D stock market

What was the closing price for Google that day?
A $96.66 B $5.43
C $96.67 D $6.08

47. Does a bear market mean the stock market is rising or going down?
A going down B staying the same
C cross dimensional static drift D rising

48. The price of stock at the end of the previous trading session
A Day High B Day Low
C Percent Change D Previous Close

Approximately how much money was one share of Apple selling for last night? Use the image to help you.
A 213.05 B 113.05
C 13.05 D 33.05

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

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

52. What is it called when you loss money on stocks you have purchased.
A corporate loss B capital of NY
C capital gain D capital loss

53. A system in which individuals are free to own, trade, and use things in order to make a profit
A capitalism B stock exchange
C bull market D bear market

If I owned 100 shares or Goodyear, how much would I receive in dividends?
A 400.00 B .40
C 40.00 D 40.00

55. What are these? NYSE – NASDAQ
A securities and exchanges B markets
C stock exhanges D stocks

How much would you buy shares of IBM for on that day?
A $155.00 B $8.00
C $160.70 D $158.20

57. Pepsi, Google, Coach, and Nike. What do these companies have in common?
A They are all companies with such expensive stock that you won’t be able to afford to invest in them in our stock market game.
B They are examples of failing companies that you wouldn’t want to invest in.
C You can buy stock in them in our stock market game.
D They are all companies that have declined to be on the stock market, you can’t buy stock in them.

58. Who regulates stock market exchanges?
A congress B Christian Garcia
C securities and exchange commission D New York stock exchange

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

The total number of shares traded in a given day.
A profit B volume
C loss D beta

*Sorry for the low quality of images 🙂

Answer Key

1. a 2. b 3. c 4. c
5. a 6. c 7. a 8. c
9. c 10. b 11. d 12. b
13. a 14. d 15. c 16. c
17. b 18. a 19. a 20. a
21. a 22. d 23. a 24. a
25. d 26. c 27. b 28. a
29. c 30. b 31. d 32. a
33. a 34. a 35. b 36. a
37. b 38. a 39. c 40. a
41. c 42. d 43. a 44. d
45. b 46. a 47. a 48. d
49. b 50. a 51. d 52. d
53. a 54. c 55. c 56. d
57. c 58. c 59. d 60. b

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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