Stock Market Quiz

What rights and returns are associated with common stock ownership?

• Voting rights and dividends

• Fixed interest payments

• Guaranteed capital gains

• Tax exemptions

How do stock exchanges primarily function?

• By issuing new stocks

• By facilitating the buying and selling of stocks

• By providing loans to companies

• By setting stock prices

What is the purpose of stock indexes in the stock market?

• To predict future stock prices

• To track the performance of a specific group of stocks

• To determine company profits

• To calculate tax liabilities

Which model is used to compute stock values using dividends?

• Price/Earnings ratio model

• Dividend discount model

• Variable growth model

• Capital asset pricing model

What does the P/E ratio model assess?

• Stock liquidity

• Relative stock values

• Dividend growth

• Market volatility

What is a source of financial capital aside from debt?

• Loans

• Equity

• Grants

• Donations

How do public corporations raise money?

• By issuing bonds

• By selling products

• By issuing stocks

• By taking loans

Why are investors willing to buy company stock?

• They can receive dividends

• They can sell the stock during any trading day

• They can influence company decisions

• They can get tax benefits

What determines the form of business ownership?

• Market demand

• Organizational structure

• Company size

• Product type

What is common stock?

• A type of bond issued by a corporation

• An ownership stake in a corporation

• A loan given to a corporation

• A government-issued security