Test your basic knowledge |

Stock Market Basics

Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • 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. Stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights






2. American Stock Exchange






3. A person who buys or sells stocks for another in exchange for a commission






4. The most basic form of ownership - including voting rights on major issues - in a company






5. Buys & sells for clients at a reduced commission. They offer little or no investment advice.






6. Dealer- has inventory like car dealer - broker- brings buyers and sellers together (like real estate broker)






7. An increase in price or value of a stock






8. Securities or SEO offered to the public on a first-come first serve basis






9. An increase in price or value of a stock






10. A division of shares of a company into a larger number of shares. (A 2 for 1 allows a shareholder to double the number of shares but worth one half of their previous value - like trading a $10 for 2 $5's)






11. Price/earnings






12. A stock selling for less that $1/share; usually high risk






13. Another name for IPO - b/c shares are not available to the public before the IPO






14. A certificate documenting the shareholder's ownership in the corporation. There is no guarantee of making money with a stock.






15. Equity financing for nonpublic companies






16. Securities market where dealers buy and sell securities for their own inventories; NASDAQ is one example






17. When issuer sells the entire issue to the underwriters






18. A list of the financial assets held by an individual or a bank or other financial institution






19. A stock selling for less that $1/share; usually high risk






20. Securities initially offered only to existing owners






21. Stop order is where the customer specifies a stop price in which once it's reached - it is converted into a market order






22. A group of underwriters formed to share the risk and to help sell an issue






23. 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.






24. Financing for new - often high-risk ventures






25. A computerized data system to provide brokers with price quotations for securities traded over the counter






26. Another name for IPO - b/c shares are not available to the public before the IPO






27. Stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights






28. Mutual fund in which shares are sold without a commission or sales charge






29. A person who buys or sells stocks for another in exchange for a commission






30. Securities or SEO offered to the public on a first-come first serve basis






31. Also known as uniform price auction b/c all successful bidders pay the same price






32. Amount that you invest in securities






33. A market characterized by falling prices for securities






34. Difference between closing price of previous day and current day






35. Financing for new - often high-risk ventures






36. New York Stock Exchange






37. A computerized data system to provide brokers with price quotations for securities traded over the counter






38. Equity financing for nonpublic companies






39. A corporation's first offer to sell stock to the public






40. 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






41. Fund that pools the savings of many individuals and invests this money in a variety of stocks - bonds - and other financial assets






42. The most basic form of ownership - including voting rights on major issues - in a company






43. American Stock Exchange






44. A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money






45. Bid- price dealer is willing to pay - ask- price dealer will sell at






46. Amount that you invest in securities






47. A division of shares of a company into a larger number of shares. (A 2 for 1 allows a shareholder to double the number of shares but worth one half of their previous value - like trading a $10 for 2 $5's)






48. When issuer sells the entire issue to the underwriters






49. Underwriter doesn't guarantee any particular amount of money to the issuer






50. Once the stock price reaches the preset stop price the order is converted ito a limit order