The Stock Market | Investing 101

What is an IPO? 

• When a stock goes bankrupt

• The first day a business opens

• Called an Initial Public Offering, it is the first day a business sells shares of its ownership to investors 

Which of the following is NOT something public companies (company who's shares can be bought by the pubic) do with profits that they earn from doing business 

• Research and develop new products like a new drink

• Build more facilities like a new lemonade stand 

• Give ALL of the money back to the founder of the company 

• Give a dividend or pay back shareholders of the company

Very important!!!! 

Stock prices represent what the value of the company.......

• of what it will be in the future

• at the moment of purchase of a stock

Which is the largest stock exchange in the world?

• American Stock Exchange (AMEX)

• New York Stock Exchange (NYSE)

• London Stock Exchange

What kind of companies typically have stocks exchanged on the NASDAQ?

• Established blue chip companies

• Tech companies

True or false: The S&P 500 is a bench of 500 companies on many exchanges around the world on a given day

• True

• False

The Dow Jones Industrial Average...

• measures the stock performance of the 30 most important companies listed on the major stock exchanges in the United States.

• measures the stock performance of all the stocks listed on the major stock exchanges in the United States.

In the 1950s, the stock market helped....

• Robber Baron rich elites to new heights 

• The Middle Class grow

Warren Buffet has always suggested Index funds for people who have NOT mastered value investing. What is an index fund? 

• A basket of stocks that follow the general growth of the market

• When your money is in control of a single investor who picks a few stocks for you

Quoted all the time during bubbles:

'You know something is wrong when _____ is talking about it"

• everyone

• no one