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






2. Amount that you invest in securities






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






4. Buying a stock at a price you set






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






6. Price/earnings






7. An order to a broker to sell (buy) when the price of a security falls (rises) to a designated level






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






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






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






11. Equity financing for nonpublic companies






12. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






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






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






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






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






17. All of the investments - including stocks - bonds - mutual funds - options - and commodities - that are traded






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






19. 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)






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






21. 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






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






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






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






25. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






26. 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.






27. Stock from nationally recognized companies which dominate the industry often having annual revenue of one billion or more






28. Financing for new - often high-risk ventures






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






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






31. New York Stock Exchange






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






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






34. Financing for new - often high-risk ventures






35. A market characterized by rising prices for securities






36. The system that prints or dsplays last sale prices and the volume of securities transactions on exchanges on a moving tape






37. Equity financing for nonpublic companies






38. A market characterized by rising prices for securities






39. That part of the earnings of a corporation that is distributed to its shareholders






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






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






42. NASDAQ was opened to his which is a website that allowed investors to trade directly with one another;






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






44. American Stock Exchange






45. NASDAQ is a computer network with no physical location and has a multiple market maker system rather than a specialist system






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






47. All of the investments - including stocks - bonds - mutual funds - options - and commodities - that are traded






48. 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






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






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