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






2. Securities initially offered only to existing owners






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






4. Equity financing for nonpublic companies






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






6. 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.






7. 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






8. American Stock Exchange






9. Also known as secondary and follow-on offering






10. A preliminary prospectus among investor to generate interest in the stock offering






11. 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






12. 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






13. The market in which securities that are not listed on exchanges are traded






14. 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)






15. The person(s) resposible for implementing a fund's investing strategy and managing its portfolio trading activities






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






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






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






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






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






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






22. Price/earnings






23. A measure of stock market prices based on thirty leading companies of the new york stock exchange and nasdaq






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






25. Buying a stock at a price you set






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






27. A preliminary prospectus among investor to generate interest in the stock offering






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






29. An increase in price or value of a stock






30. 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.






31. American Stock Exchange






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






33. 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






34. Detailed acct of company's financial position - its operations - and its investment plans for the future which is submitted to SEC for approval






35. 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






36. Also known as secondary and follow-on offering






37. 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






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






39. 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)






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






41. A measure of stock market prices based on thirty leading companies of the new york stock exchange and nasdaq






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






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






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






45. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






46. Equity financing for nonpublic companies






47. An order to a broker to sell or buy stocks or commodities at the prevailing market price






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






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






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