Stock Market Review

The return on an investment is the amount of money the investment earns, or the

• Profit

• Yield

• Revenue

• Interest

A company's market capitalization (size) is calculated by which formula?

• Stock price divided by earnings per share

• Stock price multiplied by the number of shares outstanding

• The number of shares outstanding divided by the stock price

• Stock price multiplied by the number of outstanding debt

What happens to shareholders if a company goes bankrupt?

• Shareholders receive a portion of the company's assets.

• Shareholders lose their entire investment in the company.

• Shareholders are compensated by the government.

• Shareholders gain additional shares in a new company.

Dividend is

• A stockholder’s portion of the company's profits

• A type of tax on corporate earnings

• A method of calculating interest rates

• A financial instrument used for trading

What is the most important factor that affects the value of a company?

• Cash flow

• Earnings

• Supply and demand

• Dividends

Stocks are categorized by each of the following EXCEPT: Size, Style, Solvency, Sector

• Size

• Style

• Solvency

• Sector

What do the bear and the bull stand for?

• The bear means stocks are going up and the bull means stocks are falling.

• The bear means stocks are stable and the bull means stocks are volatile.

• The bear means stocks are falling and the bull means stocks are going up.

• The bear means stocks are undervalued and the bull means stocks are overvalued.

Corporations must issue this type of stock

• Preferred

• Common

• Convertible

• Restricted

As a shareholder you are entitled to all of the following except:

• Ability to make day to day business decisions

• A copy of the company's prospectus

• Voting rights

• Possible dividends

What is an IPO?

• A type of bond issued by corporations

• An initial public offering - when a corporation first sells stock to the public

• A private sale of company shares

• A government grant for startups