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






2. Equity financing for nonpublic companies






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






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






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






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






7. When issuer sells the entire issue to the underwriters






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






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






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






11. 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






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






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






14. Also known as secondary and follow-on offering






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






16. Price/earnings






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






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






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






20. 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)






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






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






23. American Stock Exchange






24. New York Stock Exchange






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






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






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






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






29. A market characterized by rising prices for securities






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






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






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






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






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






35. Amount that you invest in securities






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






37. Financing for new - often high-risk ventures






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






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






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






41. Securities initially offered only to existing owners






42. 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)






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






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






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






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






47. 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






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






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






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