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Test your basic knowledge |
Stock Market Basics
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Subjects
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industries
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business-skills
Instructions:
Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Equity financing for nonpublic companies
Discount broker
unseasoned equity offering
private equity
Penny stock
2. That part of the earnings of a corporation that is distributed to its shareholders
Potential loss
Dividend
IPO [Initial Public Offering]
NYSE v. NASDAQ
3. A certificate documenting the shareholder's ownership in the corporation. There is no guarantee of making money with a stock.
syndicate
rights offer
Dow Jones idustrial average
Stock
4. Underwriter doesn't guarantee any particular amount of money to the issuer
venture capital VC
general cash offer
best efforts underwriting
firm commitment underwriting
5. Securities market where dealers buy and sell securities for their own inventories; NASDAQ is one example
over-the counter market
Market order
Market order
Fund manager
6. Once the stock price reaches the preset stop price the order is converted ito a limit order
AMEX
stop-limit order
No-load
stop-sell v. stop-buy
7. A corporation's first offer to sell stock to the public
rights offer
AMEX
IPO [Initial Public Offering]
Bond
8. A preliminary prospectus among investor to generate interest in the stock offering
Blue chip stock
red herring
Bear market
Stop order
9. A person who buys or sells stocks for another in exchange for a commission
Potential loss
firm commitment underwriting
Stock broker
Bond
10. Buys & sells for clients at a reduced commission. They offer little or no investment advice.
Stock split
Appreciation
Portfolio
Discount broker
11. Detailed acct of company's financial position - its operations - and its investment plans for the future which is submitted to SEC for approval
prospectus
Stop order
AMEX
Portfolio
12. Securities initially offered only to existing owners
rights offer
AMEX
private equity
Bull market
13. A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money
Bond
NYSE Hybrid Market
Fund manager
limit v. stop orders
14. Another name for IPO - b/c shares are not available to the public before the IPO
P / E
dealer v. broker
unseasoned equity offering
firm commitment underwriting
15. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory
Portfolio
Stock split
rights offer
three ways of the secondary market
16. A group of underwriters formed to share the risk and to help sell an issue
best efforts underwriting
syndicate
bid v. ask
red herring
17. Fund that pools the savings of many individuals and invests this money in a variety of stocks - bonds - and other financial assets
Blue chip stock
Mutual fund
NYSE Hybrid Market
Stock
18. Bid- price dealer is willing to pay - ask- price dealer will sell at
NYSE Hybrid Market
bid v. ask
dealer v. broker
Penny stock
19. Securities initially offered only to existing owners
Stock split
rights offer
NYSE
syndicate
20. New York Stock Exchange
P / E
Fund manager
NYSE
OTC [Over-the-counter]
21. When issuer sells the entire issue to the underwriters
Blue chip stock
firm commitment underwriting
IPO [Initial Public Offering]
rights offer
22. Price/earnings
Potential loss
Bull market
bid v. ask
P / E
23. Amount that you invest in securities
Stock
Potential loss
red herring
NASDAQ
24. Dealer- has inventory like car dealer - broker- brings buyers and sellers together (like real estate broker)
dealer v. broker
Common stock
Limit order
Bull market
25. An increase in price or value of a stock
red herring
dutch auction underwriting
stop-limit order
Appreciation
26. A measure of stock market prices based on thirty leading companies of the new york stock exchange and nasdaq
Market order
Stock broker
Dow Jones idustrial average
Securities
27. For efficient trading - not used in 1. less liquid stocks 2. during the opening and close of trading sessions 3. during times of market duress
NYSE Hybrid Market
Stop order
dealer v. broker
Stock broker
28. Trading that occurs off the exchange on which the security is listed and fourth market is the direct trading of exchange-listed securities maong investors
Bear market
IPO [Initial Public Offering]
third market v. fourth market
dutch auction underwriting
29. New York Stock Exchange
Appreciation
Blue chip stock
NYSE
third market v. fourth market
30. When issuer sells the entire issue to the underwriters
limit v. stop orders
Blue chip stock
NYSE v. NASDAQ
firm commitment underwriting
31. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory
Ticker
Fund manager
Market order
three ways of the secondary market
32. Buys & sells for clients at a reduced commission. They offer little or no investment advice.
NYSE Hybrid Market
Appreciation
NYSE
Discount broker
33. An order to a broker to sell (buy) when the price of a security falls (rises) to a designated level
bid v. ask
over-the counter market
Stop order
AMEX
34. Buying a stock at a price you set
Bull market
Stock broker
Common stock
Limit order
35. NASDAQ is a computer network with no physical location and has a multiple market maker system rather than a specialist system
Preferred Stock
Bond
NYSE
NYSE v. NASDAQ
36. A market characterized by falling prices for securities
Potential loss
seasoned equity offering (SEO)
electronic communications networks (ECNs)
Bear market
37. A computerized data system to provide brokers with price quotations for securities traded over the counter
IPO [Initial Public Offering]
NASDAQ
Stop order
Bear market
38. Another name for IPO - b/c shares are not available to the public before the IPO
Stock split
unseasoned equity offering
NYSE v. NASDAQ
AMEX
39. The system that prints or dsplays last sale prices and the volume of securities transactions on exchanges on a moving tape
best efforts underwriting
Ticker
Preferred Stock
Bear market
40. The most basic form of ownership - including voting rights on major issues - in a company
firm commitment underwriting
Stock split
Common stock
Discount broker
41. A market characterized by falling prices for securities
stop-limit order
private equity
Bear market
Bull market
42. A stock selling for less that $1/share; usually high risk
rights offer
syndicate
Penny stock
dealer v. broker
43. Once the stock price reaches the preset stop price the order is converted ito a limit order
stop-limit order
limit v. stop orders
Stock
Portfolio
44. 1. at least 2200 shareholders and average monthly trading volume for the most recent six months must be at least 100000 shares 2. at least 1.1 million stocks shares in public hands 3. must be at $100 million in market value ($60 million for IPOS) 4.
syndicate
venture capital VC
No-load
NYSE minimum requirements
45. A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money
Fund manager
three ways of the secondary market
firm commitment underwriting
Bond
46. A stock selling for less that $1/share; usually high risk
Stock split
Preferred Stock
Penny stock
rights offer
47. Stop order is where the customer specifies a stop price in which once it's reached - it is converted into a market order
limit v. stop orders
seasoned equity offering (SEO)
Stock broker
IPO [Initial Public Offering]
48. Order to sell shares if the stock price falls to a specified stop price above the current stock price; also called stop-loss b/c it is usually intended to limit losses on a long position
NASDAQ
Potential loss
AMEX
stop-sell v. stop-buy
49. Also known as uniform price auction b/c all successful bidders pay the same price
Portfolio
Bull market
over-the counter market
dutch auction underwriting
50. Difference between closing price of previous day and current day
Bear market
Stock split
Net change
bid v. ask
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