Investing Basics

What is a stock?

• A large part of a company

• A very small part of a company

• A type of bond

• A form of savings account

What happens when you buy a stock?

• You own the entire company

• You receive interest payments

• You lend money to the company

• You own a part (or a share) of that company

What does the stock market allow people to do?

• Buy and sell shares of companies

• Buy and sell commodities

• Buy and sell bonds

• Buy and sell real estate

What is a common feature of savings accounts?

• High risk and high reward

• Access to your money at any time

• Ownership of company shares

• Regular interest payments

What is the relationship between investments and risk?

• Investments have greater reward but with greater risk

• Investments have no risk

• Investments always guarantee profit

• Investments are risk-free

What happens to stock prices when a company is successful?

• Stock prices go down

• Stock prices remain the same

• Stock prices go up

• Stock prices are unaffected

What happens to stock prices when a company is struggling?

• Stock prices go up

• Stock prices go down

• Stock prices remain the same

• Stock prices are unaffected

What happens to stocks when the economy is strong?

• Stocks usually go down

• Stocks usually go up

• Stocks remain the same

• Stocks are unaffected

What happens to stocks during a bad economy or recession?

• Stocks often go up

• Stocks often go down

• Stocks remain stable

• Stocks are unaffected

Which of the following is important to consider when buying a stock?

• The company's logo

• The company's business model

• The company's office location

• The company's website design