How the Stock Market Works

A "stock" and a "share" are basically the same concept because...

• buyers share each stock that is purchased.

• buyers own a share (small part) of the company.

• the companies must share information with investors.

What percentage of companies are public?

• 75%

• 1%

• 50%

• 28%

True/False: The DOW and S&P 500 are used to get a general idea of how the whole stock market is doing?

• True

• False

True or False: The stock market's success always means the economy is also doing well since they're directly tied together.

• True

• False

What financial phrase exemplifies this information? 

• The rich have their money work for them.

• Don't put all your eggs in one basket.

• Save for a rainy day.

• A day late and a dollar short.

Who really OWNS a company that sells shares of its stock?

• The CEO

• The Shareholders

• The customers

• The Board of Directors

True or False: If the company you work for is doing well on the stock market, that means that you will get paid more.

• True

• False

When is it best to buy a stock?

• When the price is low

• When the price is high

• When the price has been holding steady

• When the stock becomes exactly one year old

What type of risk is involved with investing in the stock market in the short term?

• no risk

• low risk

• moderate risk

• high risk

When in investing in stocks (stock market), invest for the...

• day.

• short term.

• year.

• long term.