S2 AFA Stock Market Unit Final Review

Intro to Stocks

​What are Stocks?

​ A stock is a share in the ownership of a company. Stock represents a claim on the company’s assets and earnings.

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As an owner (shareholder), you are entitled to your share of the company’s earnings as well as any voting rights attached to the stock.

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Intro to Stocks

​What does the stockholder get out of the deal?

​The shareholder gets the hope that the shares will be worth more in the future.

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If the company does well, the stock will probably increase in value. If the company does not do well, the shareholder may lose the money he or she invested.

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Intro to Stocks

​Why do companies issue stock?

At some point, every company needs to raise money. Companies can either borrow it from somebody or raise it by selling part of the company.​

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​By issuing stock, the company does not have to pay back the money or make interest payments.

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Intro to Stocks

​What's an IPO?

​IPO stands for Initial Public Offering. It’s the first time the stock is available to the public to purchase.​

​The stock exchange itself is a secondary market. The primary market is the brokers.

Broker- ​A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange.

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Intro to Stocks

​What is a Dividend?

A dividend is money that a company pays to its stockholders from the profits it makes.​

​Not all companies pay dividends to their stockholders. The only way shareholders in these companies make money is to sell the stock at a higher amount than they bought it at on the open market.

Intro to Stocks

​Common Stock vs. Preferred Stocks

Common stock is the type most people purchase. It represents ownership of a company and a claim on part of the profits. Investors get one vote per stock.

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​Preferred stocks don’t have the same voting rights, but investors are usually guaranteed a fixed dividend. If the company is liquidated, they are paid off first.

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Intro to Stocks

​How do stocks trade?

​Most stocks are traded on exchanges such as the New York Stock Exchange or NASDAQ. The NYSE is a physical location whereas NASDAQ is a virtual market.

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​Exchanges are simply places where buyers and sellers meet and decide on a price

for a stock. Think of it as a flea market where buyers and sellers come together and agree on a price for a product.

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Multiple Choice

A holder or owner of stock in a company or corporation.

• stock market
• shareholder
• portfolio
• industry

Multiple Choice

A particular market where stocks and bonds are traded.

• market capitalization
• portfolio
• stock market
• shareholder

Multiple Choice

A sum of money paid to shareholders of a corporation out of its earnings.

• index
• dividend
• profit
• invest

Multiple Choice

Represents shares of ownership in a company.

• stock
• portfolio
• volume
• industry

Multiple Choice

As long as you are 18 years old and have some money, you can invest it in the stock market.

• True
• False

Multiple Choice

Apple is releasing a new iPhone that is predicted to change the cell phone world.  Millions of people have pre-ordered it.  What do you think will happen to their stock?

• It is likely to go up.
• It is likely to go down.

Multiple Choice

You decide that you want to invest a little bit of money in Apple stock.  But in order to do that you need to figure out their stock symbol.  What is the symbol that Apple uses on the stock market?  Use the image to help you figure it out.

• AAPL
• APPLE
• IPHONE
• STEVEJOBS

Multiple Choice

Approximately how much money was one share of Apple selling for last night?  Use the image to help you.

• 213.05
• 113.05
• 33.05
• 13.05

Multiple Choice

You have $250 that you are willing to invest in Apple's stock.  If Apple's stock is selling for $113.05 a share, how many shares could you buy?

• 1
• 2
• 3
• 4

Multiple Choice

Over the course of the day, the head of Apple's company is imprisoned for not paying his taxes.  What do you think will happen to Apple's stock?

• It will go up.
• It will go down.

Multiple Choice

Apple stock plummets and now you have to decide if you hold onto your stock in the hopes that it goes back up, or sell it at a loss.  Apple stock is now selling or $54.76 a share.  You have 2 shares.  When you first bought them their total value was $226.10.  What is their total value now?

• 109.52
• 22.10
• 557.22
• 5.05

Multiple Choice

A company's closing price divided by its latest annual earnings per share.

• volume
• P/E ratio
• market capitalization
• beta

Multiple Choice

The financial benefit when the revenue of a company exceeds expenses, costs, and taxes.

• loss
• profit
• volume
• portfolio

Multiple Choice

The total holdings of stock by a financial institution or a private investor.

• index
• portfolio
• stock market
• industry

Multiple Choice

You have $250 that you are willing to invest in Apple's stock.  If Apple's stock is selling for $113.05 a share, how many shares could you buy?

• 1
• 2
• 3
• 4

Multiple Choice

The highest price the stock has traded over the past year is called

• Day High
• Market Cap
  Market Cap
• 52 Week High
• Beta

Multiple Choice

The number of shares that have been traded in the current or most recent trading session is called

• Dividend
• Last
  Last
• Previous Close
• Volume

Multiple Choice

The price paid for the first share of stock in a trading session is

• Bid
• Change
• Last
• Open

Multiple Choice

Yield of the stock based on last price. Figured by dividing the yearly dividend by the last price.

• Change
• Dividend
• Dividend Yield
• Previous Close

Multiple Choice

The ticker symbol for Procter and Gamble is...

• P&G

• NYSE

• Nasdaq

• PG

Multiple Choice

What was the highest price paid for Procter & Gamble in the last year?

• 147.20

• 165.35

• 146.72

• 156.35

Multiple Choice

What does the previous close mean?

• The price of the company at the start of the day.

• The price of the stock midday.

• The price the last person paid for a share yesterday.

• The price the first person purchased the company for.

Multiple Choice

What is the volume?

• Number of shares traded for the day.

• Number of shares traded since the market opened

• Number of shares traded for an average day

• The total number of shares that a company has issued.

Multiple Choice

If you have 500 shares of a company at $20 a share and it splits 2:1, you will have

• 1,000 shares at $10 per share

• 500 shares at $40 per share

• 1,000 shares at $20 per share

• 250 shares at $40 per share

Multiple Choice

If you wanted to purchase 100 shares of Coca-Cola at $54, you would calculate it by...

• price/number of shares

• price - number of shares

• price x number of shares

• price x number of shares / price

Multiple Choice

What was the lowest dollar amount Yahoo was traded for that day?

• $4352.00

• $7.27

• $5.43

• $6.08

Multiple Choice

How much did yahoo vary during the year?

• $76.80

• $7.68

• $3.17

• $4.51

Multiple Choice

What was the closing price for Google that day?

• $96.67

• $5.43

• $6.08

• $96.66

Multiple Choice

How much profit did Nike make that day per share?

• $84.00

• $84.50

• $0.75

• $.0075

Multiple Choice

An index that tracks the stocks of a set group of 30 large, well-established, financially sound companies that are leaders in their industries

• S&P 500

• NASDAQ

• Dow Jones Industrial Average

• Stock Index

Multiple Choice

The second largest stock exchange in the world behind the NYSE.

• NASDAQ

• Pension

• NYSE

• Pension

Multiple Choice

Why would a company need to issue stock?  

• To increase its' customer base.

• To raise money.

• To stop the government from regulating it.

• To show customers that it's successful.

Multiple Choice

What is a stock market crash?

• when one or two stocks drop signifiicantly
• slow decrease in stock prices over a year
• rapid but anticipated drop in stock prices
• rapid and unanticipated drop in stock prices

Multiple Choice

Which of the following is the best definition of PROFIT?

• The total amount of income a business makes from selling products or services
• The amount of money a business has left over after paying for their costs.
• The total amount of money a business spends.

Multiple Choice

Companies such as Starbucks, Apple, Amazon, Netflix, and Facebook are

• Private Stocks

• Public Stocks

Multiple Choice

Val bought 120 shares of XYZ stock for $88.39 per share. She later sold this stock for $98.59, what is her gross capital gain?

• $10.20

• $1224

• $1020

• $120

Multiple Choice

A stock had each of the following closing prices:

$30.10, $30.20, $30. 35, $30.55, $32. 28, $31.10, $30.28, $29.18

What is the 4 day simple moving average?

• 30.51

• 30.3, 30.85, 31.07, 31.05, 30.71

• 30.71, 31.05, 31.07, 30.85, 30.3

• 30.3

Multiple Choice

Jimena and Jay own a company together in a ratio of 2:3. If the company is worth $430,300, what is the value of Jay's portion of the company?

• $258, 180

• $143, 433

• $172,120

• $717,167

Multiple Choice

One month ago a companies stock price closed at $45.38. Yesterday the stock closed at a price of $41.84. What is the change in price as a percentage? Round your answer to the nearest tenth of a percent.

• -3.5%

• -7.8%

• -8.5%

• 7.8%

Multiple Choice

Byron sold $5,385 in stock. He originally purchased the stock for $3,255. If he has to pay 15% in capital gains tax, what will be his net proceeds?

• $2130

• $319.50

• $1810.50

• $1322.25

Multiple Choice

A company announces an annual dividend of $1.32 per share to be paid quarterly. If you own 1800 shares of this company, what would you expect to be the amount of your quarterly dividend check?

• $0.33

• $9,504

• $2,376

• $594

Multiple Choice

Brandyn has 300 shares of PLTY stock. The stock's current price if $480.60. If the stock goes through a 3 for 1 split, how many shares will Brandyn have? What will be the price of each share?

• 900 shares

  $160.20

• 900 shares

  $1441.80

• 100 shares

  $160.20

• 100 shares

  $1441.80

Multiple Choice

A company has a stock value of $985 and offers an annual dividend of $14.83. What is the dividend yield? Round your answer to the nearest tenth of a percent.

• 66.4%

• 15.1%

• 1.5%

• 0.2%

Multiple Choice

Which company in this stock table has the lowest price relative to its earnings?

• RBA

• ROK

• RMD

• RHI