What is the Stock Market and how does it work?

What is our class definition of a "Stock"?

• an investment that represents a profit on the original price of a company
• an investment that represents a promise to buy a piece of a company
• an investment that it tax-free and gives voting rights to the buyer
• an investment that represents a share, or partial ownership, of a company

A "Stock Market" is:

• all of the answers are correct
• a resource for private companies to raise money by the selling of shares
• Where shares of public companies are bought and sold
• an online organization that sets the price of a company's shares

The 2 key functions of a Stock Market include:

• providing business access to capital and investors a way to build wealth
• providing rules to businesses and investors to wealth and ownership
• none of the answers are correct
• providing business the ability to enrich top executives and limit taxes

"Exchanges" are:

• online markets where companies buy resources to produce goods
• none of the answers are correct
• marketplaces where buyers and sellers trade financial securities
• websites where money is converted from one currency to another

An index of 500 stocks used to monitor prices on the NYSE, AMEX and the OTC Market

• Net Asset Value
• Standard & Poor's 500 (S&P 500)
• Efficient Market Hypothesis
• Dow Jones Industrial Average

What is the Dow Industrial Average?

• 10 significant stocks performance in the overall market
• 100 significant stock average in the NYSE
• 30 significant stocks performance in the overall market
• 2 significant stock average in all categories of stocks

What is the largest stock exchange in the world in terms of Market Capitalization?

• Tokyo Stock Exchange
• New York Stock Exchange NYSE
• Hong Kong Stock Exchange
• NASDAQ Stock Exchange

The NASDAQ is a stock exchange which deals mostly with:

• the top 500 companies
• Dow Jones
• Agriculture
• tech stocks

The NASDAQ is the largest stock exchange by volume?

• True
• False

The difference between the NYSE and the NASDAQ includes:

• NYSE is larger than NASDAQ
• NYSE is a physical marketplace and NASDAQ is online only
• NASDAQ is made up of primarliy Tech companies and NYSE is not
• All answers are correct