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WorksheetsInvesting Strand 2 Vocab Review
Total questions: 25
Worksheet time: 13mins
What does owning a share of stock represent?
A guaranteed return on investment
A fixed interest payment
Ownership in a company
A loan to the government
What is the main difference between common stock and preferred stock?
Common stock has priority in dividends w/no voting rights
Preferred stock usually has voting rights
Preferred stock has priority in dividends w/no voting rights
Common stock has fixed interest
Which of the following is an example of a capital gain?
Receiving a quarterly dividend
Selling a stock for more than you paid
Paying interest on a loan
Buying a stock at its lowest price
What are dividends?
Company loans paid to banks
Profits reinvested into a company
Payments made to shareholders from profits
Fees paid when you buy stock
What type of stock is issued by large, well-established companies and considered stable?
Growth stock
Penny stock
Blue-chip stock
Private stock
What does a stock ticker symbol represent?
The company’s full legal name
The stock's historical earnings
A unique abbreviation for a stock
A code for industry type
If a stock’s price is shown in red, what does it typically mean?
The price has increased; stock is bullish
The stock is not trading today
The price has decreased; stock is bearish
The company went bankrupt
What does EPS (Earnings Per Share) measure?
How much profit a company earns per share
The number of shares traded each day
The company’s total profit for the year
The price of a stock divided by volume
What does Market Capitalization (Market Cap) show?
The number of company employees
The total value of all outstanding shares
The value of the company’s dividends
The number of shares traded
What does a high P/E (Price-to-Earnings) ratio often suggest?
The company is undervalued
The company has no earnings
Investors expect strong future growth
Dividends will increase soon
What does a beta of 1.5 indicate?
The stock is 50% less volatile than the market
The stock is 50% more volatile than the market
The stock pays high dividends
The stock is not correlated to the market
What does “volume” refer to in stock trading?
The number of shares outstanding
The market cap of the company
The total number of shares traded
The total earnings of a company
What does dividend yield measure?
The dividend amount compared to earnings
The dividend amount relative to stock price
The dividend amount compared to company value
The dividend amount relative to total assets
What is the benefit of long-term capital gains over short-term?
They are taxed at higher rates
They are not subject to any taxes
They are taxed at lower rates
They offer larger dividend payouts
What financial report shows a company’s revenues, expenses, and net income over a period?
Balance sheet
Cash flow statement
Annual report
Income statement
What does a balance sheet show?
A company’s brand value
A list of shareholders
Assets, liabilities, and equity
Sales and marketing costs
Which of the following is a major U.S. stock index?
Federal Reserve Index
NASDAQ Composite
Economic Freedom Index
Global Trade Index
What happens when a company announces a stock split?
The company’s total market value doubles overnight
The number of shares increases while overall value stays the same
Investors automatically receive a higher dividend payment per share
The company must legally change its name and branding
Where are most stocks bought and sold?
Through company websites
At grocery stores
On stock exchanges
At annual shareholder meetings
What is a market order?
An order to sell only at a specific price
A delayed purchase of stock
An order to buy or sell at current price
An order that waits for company approval
What does a limit order allow an investor to do?
Specify the exact price at which to buy or sell
Cancel any trade at any time without penalty
Restrict trading to fixed-income securities like bonds
Eliminate any tax obligations on investment gains
What is the purpose of a stop order?
To guarantee dividends
To automatically sell at a trigger price
To double market cap
To prevent trading on holidays
What is short selling?
Buying low and holding long-term
Selling after a stock price drops
Selling borrowed stock to buy it back lower
Trading risky low-priced stocks
What is a key feature of owning common stock in a company?
Guaranteed annual dividend payments regardless of profit
Priority access to company assets during bankruptcy
Voting rights in corporate decisions and elections
Fixed income payments similar to a bond
Who regulates the stock market in the U.S.?
Federal Trade Commission (FTC)
Securities and Exchange Commission (SEC)
World Bank
Internal Revenue Service (IRS)
