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. 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






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






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






4. Financing for new - often high-risk ventures






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






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






7. When issuer sells the entire issue to the underwriters






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






9. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






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






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






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






13. New York Stock Exchange






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






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






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






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






18. When issuer sells the entire issue to the underwriters






19. American Stock Exchange






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






21. Financing for new - often high-risk ventures






22. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






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






24. A market characterized by rising prices for securities






25. An increase in price or value of a stock






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






27. 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.






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






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






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






31. 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.






32. Amount that you invest in securities






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






34. 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






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






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






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






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






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






40. 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






41. 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






42. Price/earnings






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






44. Equity financing for nonpublic companies






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






46. 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)






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






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






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






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