Understanding the Stock Market 2

What was the primary reason the Dutch East India Company turned to private citizens for investments?

• To fund their expensive voyages

• To compete with other companies

• To reduce the number of ships

• To avoid paying taxes

What is the first step a new company takes when launching on the stock market?

• Announcing dividends

• Selling stocks to the public

• Advertising itself to big investors

• Buying back shares

How does an increase in demand for a company's stocks affect its stock price?

• The stock price remains the same

• The stock price becomes volatile

• The stock price increases

• The stock price decreases

Which of the following is NOT a factor that influences stock market fluctuations?

• Investor's personal interests

• Fluctuating price of materials

• Changes in production technology

• Company's logo design

Why do most professionals promote reliable long-term investing?

• To increase day-to-day noise in the market

• To make quick cash

• To reduce the risk of financial crises

• To avoid paying taxes