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






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






3. 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






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






5. Securities initially offered only to existing owners






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






7. 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






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






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






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






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






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






13. 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






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






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






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






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






18. An increase in price or value of a stock






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






20. New York Stock Exchange






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






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






23. Equity financing for nonpublic companies






24. American Stock Exchange






25. When issuer sells the entire issue to the underwriters






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






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






28. A market characterized by falling prices for securities






29. 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






30. 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






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






32. Securities initially offered only to existing owners






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






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






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






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






37. Also known as secondary and follow-on offering






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






39. Financing for new - often high-risk ventures






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






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






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






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






44. 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)






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






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






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






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






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






50. Buying a stock at a price you set