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. An increase in price or value of a stock






2. 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






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






4. An increase in price or value of a stock






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






6. Securities initially offered only to existing owners






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






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






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






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






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






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






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






14. New York Stock Exchange






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






16. Equity financing for nonpublic companies






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






18. Price/earnings






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






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






21. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






22. American Stock Exchange






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






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






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






26. 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






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






28. 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)






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






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






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






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






33. Financing for new - often high-risk ventures






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






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






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






37. 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






38. When issuer sells the entire issue to the underwriters






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






40. 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)






41. 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






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






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






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






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






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






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






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






49. 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.






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