Econ Unit 6 Review

Dividends refer to the part of a company's profits that are:

• used specifically for expansion

• are collected as taxes

• are shared with stockholders

• are reinvested in the stock market

Preferred stockholders:

• get paid before common stockholders

• get voting rights in company decisions

• both are true

• neither are true

IPO's, or Initial Public Offerings, are underwritten by investment banks and are approved by:

• the Securities and Exchange Commission

• the Federal Deposit Insurance Corporation

• the Federal Trade Commission

• Department of Finance

A stock price would increase when:

• there are more sellers (shares) than buyers

• there are more buyers than sellers (shares)

A company has 400 outstanding shares and a current stock price of $10 per share. What is the market capitalization for this company?

• $40

• $390

• $4000

• $410

Earnings are what usually determine stock prices in:

• the long run

• the short run

A stock index is primarily used to:

• compare U.S. stocks to foreign stocks

• measure the overall performance of the stock market

• persuade potential investors to buy stock

• all of the above

How many company’s stock prices are listed on the Dow Jones Industrial Average index?

• 30

• 50

• 300

• 500

Which of the following is true about index funds?

• they allow investors to put money into all the companies listed in the index

• they are a safer investment than hedge funds

• they are typically used for long term investing

• all are true

Which of the following stock markets does not have a physical trading location?

• National Association of Securities Dealers Automated Quotations (NASDAQ)

• American Securities Exchange (ASE)

• New York Stock Exchange (NYSE)

• International Securities Exchange (ISE)