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What is a Stock?

Total questions: 20

Worksheet time: 10mins

Name
Class
Date
1.

If I own McDonalds stock...

a)

I get free food during my visits.

b)

I get to recommend recipes to the menu.

c)

I can fire someone if they treat me poorly during my visit.

d)

I have a vote on certain cooperate matters.

2.
Stocks represent ownership in a corporation.
a)
True
b)
False
3.
People who invest in stocks cannot lose their money.
a)
True
b)
False
4.
Mark bought 100 shares of intel stock.  Each share sold for $35.50.  If no fees were involved, Mark paid $3,550 for the shares.
a)
True
b)
False
5.
The price people pay for a stock is called a dividend.
a)
True
b)
False
6.
People who own stocks are guaranteed a return on the money they have invested in stocks. 
a)
True
b)
False
7.
The only way stockholders make money is through dividend payments while they own the stock. 
a)
True
b)
False
8.
One way stockholders make money is to sell their stock for more than they paid for it. 
a)
True
b)
False
9.
Stockholders can reduce the risk on their stock investment by diversifying their portfolios. 
a)
True
b)
False
10.
The New York Stock Exchange is the only place where people can buy and sell stocks. 
a)
True
b)
False
11.

What is a stock?

a)

Loan

b)

Share of ownership in a company

c)

Dividend

d)

All of the above

12.

Why do corporations issue stock?

a)

To get richer

b)

To avoid bankruptcy

c)

To give their executives larger bonuses

d)

To raise money for expansion

13.

When the shares of stock are first issued, to whom are they sold?

a)

Investment Bankers

b)

Public Buyers

c)

Private Buyers

d)

Venture Capitalists

14.

Why do investment bankers buy the stock?

a)

So they can control a large portion of the company's voting rights

b)

So they can buy it back at a lower price

c)

So they can sell it at a higher price

d)

So they can short the company because they think its worth will fall soon

15.

What are stock markets?

a)

Designated market for IPOs

b)

Designated market for investment bankers only

c)

Designated market for trading varous kinds of securities

16.

How do people earn money from stocks?

a)

Dividends

b)

Capital Gain

c)

Neither Capital Gain or Dividends

d)

Both Capital Gain and Dividends

17.

A dividend is...

a)

Share of ownership in a company

b)

Loan to a company

c)

Piece of the company's profits paid to the owners

d)

All of the above

18.

What determines the price of stock?

a)

Supply and Demand

b)

The NYSE

c)

The NASDAQ

d)

The Company

19.

What's an advantage of owning stock when compared to other investment types?

a)

Liquidity

b)

Growth Potential

c)

Voting Rights

d)

All of the Above

20.

What is a disadvantage of owning stock?

a)

Could lose some of your investment

b)

Could lose all of your investment

c)

You may not make any money at all

d)

All of the above

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