Stock Market Basics

What is a stock?

• Anything affecting business

• Ownership in a corporation

• A type of currency

• A type of earnings

What is the stock market?

• A place to buy groceries

• A type of currency

• A form of entertainment

• A marketplace for buying and selling shares of publicly traded companies.

What is the difference between common stock and preferred stock?

• Common stock has no ownership in a company and no voting rights

• Preferred stock has lower claim on assets and earnings

• Common stock has higher claim on assets and earnings

• Common stock represents ownership in a company and typically comes with voting rights, while preferred stock usually does not have voting rights but has a higher claim on assets and earnings.

What is the role of a stockbroker?

• To provide medical advice

• To bake and sell cakes

• To buy and sell stocks on behalf of clients, provide investment advice, and manage investment portfolios.

• To fix broken stocks

What are the major stock exchanges in the world?

• Chicago Stock Exchange, Seoul Stock Exchange, Toronto Stock Exchange

• Dow Jones Stock Exchange, Paris Stock Exchange, Frankfurt Stock Exchange

• Hong Kong Stock Exchange, Mumbai Stock Exchange, Sydney Stock Exchange

• NYSE, NASDAQ, Tokyo Stock Exchange, Shanghai Stock Exchange, London Stock Exchange

What is the significance of stock indices like the Dow Jones Industrial Average and the S&P 500?

• They are used to measure the performance of the housing market

• They are used to measure the performance of the overall stock market or specific sectors of the market.

• They are used to predict the weather patterns in the stock market

• They are used to determine the price of individual stocks

What are the factors that can affect stock prices?

• Company performance, economic indicators, market sentiment, and geopolitical events

• Weather conditions

• Number of employees in the company

• Social media trends

What are dividends?

• A portion of a company's profits distributed to shareholders

• The amount of money a company owes to its creditors

• The price of a stock on a specific date

• A type of loan given to the company by shareholders

What are the risks associated with investing in the stock market?

• No potential for loss

• Guaranteed high returns

• Market volatility, potential for loss of principal, economic and political factors

• Stable and predictable market

If you buy a company's stock...

• you own part of the company

• you have lent money to the company

• you are liable for the company's debts

• the company will return your original investment to you with interest