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July 16, 2018
 
 

Exam - What is The Stock Market

1) If you own a business, what advantage do you gain by selling shares to others?

a) You increase the reward
b) Your business information is more secure
c) You have more control of the company
d) You reduce your risk

2) What does a share of stock represent?

a) An account payable
b) A guaranteed return on your investment
c) Share of ownership in a corporation
d) A verification of your employment with the company

3) Which of the following benefits does a stock market provide?

a) A stock market makes it easier to find buyers and sellers
b) A stock market makes it easier to determine true value of stocks and other securities
c) A stock market provides a legalized forum for gambling
d) Both a and b

4) What is a risk of taking a private company public?

a) The shares of stock will fluctuate in price
b) The shares of stock may drop in price
c) The shares of stock may drastically rise in price
d) Public companies must announce earnings and other data that they would rather keep private

5) When a company first offers shares to the public, it is called a(n):

a) Grand opening
b) IPO
c) Rights offering
d) Secondary offering

6) What is perhaps the biggest advantage of having a well-run stock market?

a) It allows individuals to speculate on other companies
b) It allows corporations to speculate on other companies
c) It allows corporations to loan money
d) It allows corporations to easily raise capital

7) What is the key difference between the NYSE and Nasdaq markets?

a) NYSE is a live auction while Nasdaq is an electronic network
b) NYSE is an electronic market while Nasdaq is a live auction
c) NYSE is reserved for the largest corporations
d) Nasdaq is reserved for the largest corporations

8) Corporations traded on the NYSE have how many letters in their symbols?

a) Three or more
b) Three or less
c) Four or less
d) Four or more

9) Corporations traded on the Nasdaq have how many letters in their symbols?

a) Three or more
b) Two or less
c) Three or less
d) Four or more

10) After an IPO, shares of stock are traded on the:

a) Primary market
b) Secondary market
c) IPO market
d) Dealer-to-dealer market


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