Understanding the Stock Market 1

Which of the following topics is often covered in the news but can feel like a secret code?

• Weather

• Sports

• Stock Market

• Politics

What is a stock?

• A large piece of a company

• A small piece or share of a company

• A company's profit

• A type of bond

Which of the following is a public company?

• A local bakery

• A private tech startup

• Hershey's

• Mars

What does it mean when the stock market goes up?

• All company shares increase in price

• Overall, the price for pieces of public companies increases

• The economy is doing well

• The Dow and S&P 500 both increase

What is the Dow?

• A collection of 30 different companies' stocks

• A collection of 500 different companies' stocks

• A measure of the economy

• A type of bond

How is the stock market different from the economy?

• The stock market is a scoreboard, while the economy is the entire stadium

• The stock market only includes public companies

• The stock market is the same as the economy

• The stock market is a part of the economy

During the 2020 coronavirus pandemic, what was the relationship between the stock market and the economy?

• The stock market was down while the economy was booming

• The stock market was reaching new highs while many Americans faced financial disaster

• Both were doing poorly

• Both were doing well

What is the first step in a simple stock trade?

• Sell shares at the market price

• Wait for the price to change

• Buy one or more shares at the market price

• Research the company

What is the conventional wisdom for making money in the stock market?

• Buy high, sell low

• Buy low, sell high

• Buy and sell quickly

• Avoid buying stocks

What is a good strategy for long-term investment?

• Investing only in private companies

• Following flashy stock market tips

• Investing in retirement products like IRAs and 401ks

• Frequent trading