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






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






3. Securities initially offered only to existing owners






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






5. Price/earnings






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






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






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






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






10. A market characterized by falling prices for securities






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






12. 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)






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






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






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






16. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






17. Also known as secondary and follow-on offering






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






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






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






22. New York Stock Exchange






23. 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






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






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






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. Amount that you invest in securities






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






29. 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






30. Also known as secondary and follow-on offering






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






32. 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.






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






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






35. An increase in price or value of a stock






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






37. Securities initially offered only to existing owners






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






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






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






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






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






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






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






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






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






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






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. Difference between closing price of previous day and current day






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