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Stock Market/Investing Test

Total questions: 50

Worksheet time: 26mins

Name
Class
Date
1.

professional that makes stock trades for their investor

a)

dividend

b)

asset

c)

stockbroker

d)

stockholder

2.

to use money in hopes of making a profit

a)

risk

b)

invest

c)

dividend

d)

asset

3.

financial gain, a return on your money

a)

loss

b)

profit

c)

risk

d)

asset

4.

a person that trades money for shares/stock in a company

a)

stockbroker

b)

dividend

c)

stockholder

d)

asset

5.

When a company earns a profit, sometimes those profits are distributed to the company’s shareholders. This means those shareholders are paid a _________________.

a)

dividend

b)

asset

c)

stock

d)

bankrupt

6.

Usually, when there is high demand (want) for ownership of a particular company or a product made by that company, what happens to the price of that company’s stock?

a)

goes up

b)

goes down

c)

stays the same

7.

Which answer best supports the idea that investing in the stock market is better than putting money in a savings account?

a)

Investing in the stock market is a safer way to earn money

b)

Investing in the stock market gives a better return on your money

c)

Investing in the stock market guarantees investors they will make a profit

8.

a group of companies on the stock market such as NASDAQ, DOW Jones, and S&P 500

a)

stock

b)

index

c)

asset

d)

stockbroker

9.

1-4 letter symbol used to represent a company

a)

tic tok

b)

stocker

c)

stock ticker

d)

stocking

10.

A key difference between saving and investing is

a)

Saving is for everyone, investing is for the wealthy

b)

Your money is insured when investing, it is not in savings

c)

Investing has a guaranteed return, savings does not

d)

Saving is for emergencies & goals, investing is for long-term wealth

11.

Why is compound interest more beneficial than simple interest? (hint: choose 2 correct answers)

a)

Your money grows faster when it is compounded

b)

You earn interest on your interest

c)

Fees for compound interest are greater than simple interest

d)

Compound interest is hard to calculate, so fewer use it

12.

Which would be considered the highest risk investment type?

a)

Stock

b)

Mutual Fund

c)

Bond

d)

Money Market Account

13.

The relationship between risk and return can be stated as

a)

Higher risk indicates higher return

b)

Higher risk indicates lower return

c)

Lower risk indicates higher return

d)

No relationship exists between risk and return

14.

Which is NOT a stock market index?

a)

New York Stock Exchange

b)

Dow Jones Industrial Average

c)

S&P 500

d)

Nasdaq

15.

How can you make money on stocks? (hint: choose 2 correct answers)

a)

A capital gain

b)

Interest

c)

Dividends

d)

Holding the stock at least 3 years

16.

A diversified portfolio is desirable because

a)

It limits investment choice

b)

It's a good predictor on rate of return

c)

It increases risk and return

d)

It decreases risk

17.

Why is it important to start investing as soon as possible?

a)

You take less risk when you are young, so money will be safe

b)

You have more time for your money to compound

c)

Investing is an easy way to make quick money

d)

Fees on investments are cheaper when you are younger

18.

True or False: Investing in a diversified portfolio of stocks guarantees you will not lose money.

a)

True

b)

False

19.
What is the largest equities market in the world?
a)
American Stock Exchange (AMEX)
b)
NASDAQ market
c)
New York Stock Exchange (NYSE)
d)
Over-the-counter (OTC) market
20.
An investor bought 40 shares of ABC corporation's stock at $80 a share. The investor receives notice that there has been a 2-for-1 stock split. Based on this info, the investor would own at the moment of the split
a)
20 shares of the stock and the price of each share is $80
b)
40 shares of the stock and the price of each share is $40.
c)
80 shares of the stock and the price of each share is $40.
d)
80 shares of the stock and the price of each share is $80.
21.
George received a dividend from the company in which he is a stockholder. A dividend is
a)
profit from the sales of some of his shares of stock.
b)
distribution of part of a company's profits.
c)
required by the SEC to be given to shareholders.
d)
interest on his shares of preferred stock.
22.
If a business wants to raise capital but not create debt, it can
a)
float a bond issue
b)
issue common stock
c)
borrow money from a commercial bank
d)
borrow money from the government
23.
Jaquailia is an investor. Which financial product makes her a shareholder in a corporation?
a)
bonds
b)
certificate of deposit
c)
common stocks
d)
Bond mutual funds
24.
A Neon Oil Corporation tanker spilled oil in the ocean around Australia. As a result of this accident, the share price of this stock is likely to
a)
decrease
b)
increase
c)
not be affected and remain about the same
d)
fluctuate
25.
What is the chief reason corporations issue stock?
a)
to give consumers ownership in their company
b)
to give consumers ownership in their company
c)
to secur tax advantages
d)
to raise money for the corporation
26.
Municipal bonds are
a)
issued by investment firms
b)
issued by local governments to raise money for roads, bridges, and other construction projects
c)
guarantee high dividends to bondholders
d)
a tax to raise money for city operations
27.
A government report indicated that the use of Pax's aspirin-free painkiller resulted in 100 cases of stomach poisoning.  A large number of Pax's stockholders are likely to
a)
buy shares causing the price of the stock to increase
b)
sell shares causing the price of the stock to decrease
c)
not react, causing the price of the stock to remain about the same
d)
buy Pax corporate stock
28.
Nequan bought stock for $4,000 and one year later he sold it for $1,000. The sale resulted in a
a)
price earnings
b)
market value
c)
capital loss
d)
yield
29.
A ______ market is one that sees sustained increase in stock prices over time.
a)
Bear
b)
Bull
c)
Volatile
30.
A ______ market is one that sees sustained decrease in stock prices over time.
a)
Bear
b)
Bull
c)
Volatile
d)
Goat
31.
The Government agency that regulates the stock markets is called the ________
a)
Mr Tucker's Goon Squad
b)
Securities and Exchange Commission
c)
The Federal Bureau of Investigation
d)
The Federal Exchange Team
32.
What do stock indices show investors?
a)
The overall financial health of their owned stocks
b)
The overall rating of each stock market
c)
A select group of companies and the current state of their stock.
d)
The markets, every company, everywhere.
33.
Corporations must pay dividends to stock holders regardless of profits
a)
YES
b)
NO
34.
Savings account with higher interest rate (variable rate)
a)
Certificate of Deposit
b)
Regular savings
c)
Money market 
d)
Money order
35.
—Buying little pieces of a whole lot of different companies
a)
Stocks
b)
Bonds 
c)
Mutual funds
d)
T-bills
36.
Conner wants to purchase stocks with the money he received from his tax return. Who would he contact to make the transaction?
a)
A brokerage firm
b)
The New York Stock Exchange
c)
A real estate agent
d)
The American Stock Exchange
37.
What is a mutual Fund?
a)
A loan an investor makes to a company or government that pays interest over time.
b)
A share of ownership in local government.
c)
A collection of investments sold as a package.
d)
An option to purchase something in the future at todays price.
38.
Employer sponsored retirement savings plan.
a)
401K
b)
IRA
c)
Individual Retirement Account
d)
Roth IRA
39.
Interest calculated on both the principal and the accrued interest
a)
Simple interest
b)
Compound interest
40.
You purchased 100 shares of Nike at $47.75 per share. A year later you sell your 100 shares for $62 per share.
1. Did you make a profit or lose money?
2. How much money did you make or lose? 
a)
Profit $1,425
b)
Loss $1,425
c)
Profit $10,975
d)
Loss $10,975
41.
Which stock closed nearest to its low of the year?
a)
Msft
b)
Pep
c)
Toyota
42.
Which stock pays the highest dividend?
a)
Msft
b)
Pep
c)
Toyota
43.

What is the value of The Coca-Cola Company (KO) stock.

a)

$47.30

b)

$247.30

c)

$9460

d)

$9640

44.
Some companies are owned by families or a small number of investors and do not issue stock to the public. These companies are known as __________ held companies.
a)
Publicly
b)
Privately
45.
Owners of _______________ can vote for the board of directors and on issues that come up at annual meetings.
a)
Common Stock
b)
Preferred Stock
46.
The Board of Directors of ABC Company voted to share some of the profits with its shareholders. They have decided to issue
a)
Dividends
b)
Bonds
c)
Bonuses
47.
An investor takes a risk when buying any stock.
a)
True
b)
False
48.
Only the very rich can buy stock.
a)
True
b)
False
49.
People who invest in the stock market will always make money.
a)
True
b)
False
50.
The government owns the stock market.
a)
True
b)
False

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