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OTB Ch 31 Stocks

Total questions: 50

Worksheet time: 25mins

Name
Class
Date
1.

Dividends are guaranteed.

a)

True

b)

False

2.

Dividends reflect the company's earnings.

a)

True

b)

False

3.

Dividends are payouts to shareholders.

a)

True

b)

False

4.

New and young companies typically offer dividends.

a)

True

b)

False

5.

Which animal represents a strong market?

a)

Bear

b)

Bull

6.

Which animal represents a weak market?

a)

Bear

b)

Bull

7.

Companies detail the status of the business with financial reports and summaries in this document.

a)

Prospectus

b)

Annual Report

c)

Wall Street Journal

d)

Marketwatch.com

8.

This document is provided to potential investors as a written offer to sell securities.

a)

Prospectus

b)

Annual Report

c)

Wall Street Journal

d)

Marketwatch.com

9.

US Congress is at the top of the regulatory pyramid.

a)

True

b)

False

10.

Which entity is at the bottom of the regulatory pyramid?

a)

US Congress

b)

Securities and Exchange Commission

c)

Stock Exchanges

d)

Individual Brokerage Firms

11.

Minimizing your risk by purchasing the same stock in regular intervals at various stock prices is called...

a)

Diversification

b)

Dollar Cost Averaging

c)

Buying and Holding

d)

Prospectus

12.

Investments in a variety of stocks, bonds, real estate, and collectibles is called...

a)

Diversification

b)

Risky

c)

Dollar Cost Averaging

d)

Inclusion

13.

Which example is more diverse?

a)

A stock portfolio with all tech stocks

b)

A stock portfolio with stocks from a variety of industries

c)

A stock portfolio with stock in 1 company

14.

Buy low and sell high is the basic principle in making money. What is it called when you sell high first and then buy low?

a)

Short Selling

b)

Buying on Margin

c)

Buying and Holding

15.

Which investment is considered to have the lowest risk?

a)

Commodities

b)

Collectibles

c)

Real Estate

d)

Savings Bonds

16.

Which investment offers the highest potential rate of return?

a)

Savings Account

b)

Certificate of Deposit

c)

Municipal Bond

d)

Blue-Chip Stocks

17.

High Risk =

a)

High Reward

b)

Low Reward

18.

Low Risk =

a)

Low Reward

b)

High Reward

19.

How much equity do you have in this property?

Value = $250,000

Debt = $50,000

Equity = ??

a)

$250,000

b)

$50,000

c)

$200,000

d)

$300,000

20.

Equity = Market Value - Debt

a)

True

b)

False

21.

A commodity is a raw material or primary agricultural product that can be bought and sold.

a)

True

b)

False

22.

Bonds provide ownership stake in a company.

a)

True

b)

False

23.

Which provides and ownership stake with potential voting rights?

a)

Stocks

b)

Bonds

24.

Companies raise capital by issuing _______ to investors. In return, the investors earn interest over time.

a)

Stocks

b)

Bonds

25.

As a company converts from private to public, a(n) _______ is issued.

a)

IPO

b)

PPO

c)

HMO

d)

ADA

26.

IPO stands for....

a)

Initial Public Offering

b)

Interest Providing Operation

c)

International Public Organization

d)

Initial Price Observation

27.

All stocks are bought and sold on a stock exchange.

a)

True

b)

False

28.

Public company stocks are bought and sold on stock exchanges.

a)

True

b)

False

29.

When the cost of goods increases more than the value of stocks.

a)

Investing

b)

Inflation Risk

c)

Stock

d)

Stock Index

e)

Stock Exchange

30.

The Dow Jones Industrial Average is a(n)

a)

Investing

b)

Inflation Risk

c)

Stock

d)

Stock Index

e)

Stock Exchange

31.

A marketplace to buy and sell stocks.

a)

Investing

b)

Inflation Risk

c)

Stock

d)

Stock Index

e)

Stock Exchange

32.

Share of ownership in a company.

a)

Investing

b)

Inflation Risk

c)

Stock

d)

Stock Index

e)

Stock Exchange

33.

Putting money into stocks.

a)

Investing

b)

Inflation Risk

c)

Stock

d)

Stock Index

e)

Stock Exchange

34.

Buying and selling stock based on minute-by-minute changes is called...

a)

Day Trading

b)

Speculative Stock

c)

Yield

d)

Stock Exchange

35.

This type of investment is a way for an investor to share risk with others by pooling money and purchasing diversified securities.

a)

Preferred Stock

b)

Common Stock

c)

Blue-Chip Stock

d)

Mutual Fund

36.

This is the primary form of ownership in a company.

a)

Preferred Stock

b)

Common Stock

c)

Blue-Chip Stock

d)

Mutual Fund

37.

Yield refers to the return on investment, or the amount of money an investment earns.

a)

True

b)

False

38.

While not the most liquid, stocks are still considered liquid assets because they can be turned into cash quickly.

a)

True

b)

False

39.

Speculative stocks are safer than blue-chip stocks.

a)

True

b)

False

40.

If a company fails, common stockholders are paid before preferred stockholders.

a)

True

b)

False

41.

You can automatically become a partner in a company by purchasing stocks in a company.

a)

True

b)

False

42.

Which is the second largest stock exchange in the world?

a)

NYSE

b)

NASDAQ

c)

Chicago Stock Exchange

d)

IPO

43.

Which is the largest stock exchange in the world?

a)

NYSE

b)

NASDAQ

c)

Chicago Stock Exchange

d)

IPO

44.

Market capitalization is the value of all outstanding shares of a company. (Stock price x number of shares)

a)

True

b)

False

45.

Dow Jones Industrial Average...

a)

Tracks stocks for a set of 30, well-established companies

b)

Tracks stocks of 500 large cap companies who are leaders of industry

c)

Is a stock exchange

46.

S&P 500...

a)

Tracks stocks for a set of 30, well-established companies

b)

Tracks stocks of 500 large cap companies who are leaders of industry

c)

Is a stock exchange

47.

Profit from the sale of an asset.

a)

Capital Gain

b)

Bond

c)

Dividend

d)

Rate of Return

48.

An index fund is designed to mimic a stock market.

a)

True

b)

False

49.

Where can historical stock prices and investment information can be found?

a)

marketwatch.com

b)

prospectus

c)

annual report

50.

Some sort of broker is required to buy and sell stocks on an exchange.

a)

True

b)

False