Stock Basics Review

Front

Which of the following is NOT a statement that could apply to a stock? Options: It is a security that shows partial ownership of a company's asset., The more shares you own, the more of a claim you have in a company., They are also known as equities and measured in shares., It is a certificate that shows you have total control of a company.

Back

It is a certificate that shows you have total control of a company.

Front

Why do companies sell stocks?

Back

Primarily to make money and raise funds to run the business.

Front

Which of the following is not a perk to being a shareholder (stockholder)? Options: You can start a franchise with the company you own a stock with., Access dividends (if offered by the company)., Get to vote in company matters, Own a part of the company's assets.

Back

You can start a franchise with the company you own a stock with.

Front

You are an investor, who just bought a stock this year and sold it for a profit of $5,000. If you are in a tax bracket that has a capital gains tax rate of 30%, how much will you have to pay in taxes on your capital gains?

Back

$1,500

Front

Which of the following is good advice, when it comes to avoiding Capital gains taxes: Hold onto your stocks for longer than a year to avoid paying a large tax fee., Sell your stocks quickly to keep it from accumulating value and having to pay more later., Diversify your portfolio to mitigate your losses.

Back

Hold onto your stocks for longer than a year to avoid paying a large tax fee.

Front

If you get a quarterly dividend from Toyota in the amount of $2.50 per share, how much will you get in one year, if you own 20 shares?

Back

$200.00

Front

A rising stock price is a sign that...

Back

There is high demand for the stock but limited shares

Front

Which organization will investigate unfair market practices and insider trading? Options: Federal Communications Commission (FCC), Securities and Exchange Commission (SEC), Central Intelligence Agency (CIA), Federal Bureau of Investigation (FBI)

Back

Securities and Exchange Commission (SEC)

Front

If the market has been on a steady rise for the last few months and seems to see a rise in stock prices, which type of market is being described?

Back

Bull Market

Front

If a company wants to go public, what do they have to do first?

Back

File an initial public offer (IPO).