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






2. 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






3. A market characterized by rising prices for securities






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






5. Securities initially offered only to existing owners






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






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






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






9. Equity financing for nonpublic companies






10. New York Stock Exchange






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






12. Amount that you invest in securities






13. An increase in price or value of a stock






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






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






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






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






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






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






20. When issuer sells the entire issue to the underwriters






21. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






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






23. Also known as secondary and follow-on offering






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






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






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






27. New York Stock Exchange






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






29. 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)






30. 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






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






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






33. 1directly with other investors - indirectly through a broker who arranges transactions with others - directly with a dealer who buys and sells securities from inventory






34. Buying a stock at a price you set






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






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






37. A market characterized by rising prices for securities






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






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






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






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






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






43. Financing for new - often high-risk ventures






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






45. A market characterized by falling prices for securities






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






47. 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.






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






49. 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.






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