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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. Equity financing for nonpublic companies






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






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






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






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






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






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






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






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






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






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






12. Securities initially offered only to existing owners






13. A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money






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






15. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






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






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






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






19. Securities initially offered only to existing owners






20. New York Stock Exchange






21. When issuer sells the entire issue to the underwriters






22. Price/earnings






23. Amount that you invest in securities






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






25. An increase in price or value of a stock






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






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. 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






29. New York Stock Exchange






30. When issuer sells the entire issue to the underwriters






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






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






34. Buying a stock at a price you set






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






36. A market characterized by falling prices for securities






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






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






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






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






41. A market characterized by falling prices for securities






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






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






44. 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.






45. A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money






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






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






48. 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






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






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







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