Stock Market - Multiple Choice

What is a stock?

• A loan given to a company

• A share of ownership in a company

• A type of bond

• A certificate of deposit

What does it mean when a stock price goes up?

• The company is losing money

• The company issued new shares

• Investors are willing to pay more for the stock

• The government increased interest rates

Where are most U.S. stocks bought and sold?

• The Federal Reserve

• The New York Stock Exchange (NYSE) and Nasdaq

• Local banks

• The U.S. Treasury

What is the primary purpose of the stock market?

• To allow companies to raise money by selling shares

• To help the government collect taxes

• To ensure all stocks increase in value

• To provide loans to small businesses

Which government agency regulates the stock market in the U.S.?

• The Federal Reserve

• The Securities and Exchange Commission (SEC)

• The Department of Treasury

• The Internal Revenue Service (IRS)

What is a dividend?

• The increase in stock price over time

• A payment made to shareholders from company profits

• A penalty for selling stocks early

• A fee for trading stocks

What is an index fund?

• A type of investment that follows the performance of a market index

• A high-risk stock that can double in value

• A collection of government bonds

• A special type of savings account

What is a bond?

• A share of ownership in a company

• A loan made to a company or government

• A type of stock that doesn’t pay dividends

• A savings account with a fixed interest rate

Which investment type typically has the lowest risk?

• Individual stocks

• Index funds

• Bonds

• Cryptocurrency

What is the benefit of investing in a mutual fund?

• It is risk-free

• It is managed by professionals

• It only invests in government bonds

• It guarantees a fixed return