WorksheetsUnit 2.2 Types of Investing
Total questions: 21
Worksheet time: 11mins
Fill in the blank: One who owns one or more shares of stock is called a ________.
Shareholder
Broker
Auditor
Manager
Fill in the blank: The price of a company’s first sale of stock to the public is called an ________.
IPO
Dividend
Bond
Merger
What was the price per share of Microsoft's IPO on March 13, 1986?
$21.00 per share
$15.50 per share
$30.00 per share
$10.00 per share
Fill in the blank: ________ is the purchase of an asset with the hope that it will increase in value in the future.
Speculation
Depreciation
Consumption
Donation
Fill in the blank: ________ is a share of a company's net profit to its shareholders.
Dividend
Bonus
Interest
Commission
How is Market Capitalization (Mkt Cap) calculated?
Share price × Number of shares
Annual profit × Number of employees
Total debt × Share price
Number of shares × Annual profit
Small-cap stocks represent companies with between _______ and _______ in market capitalization. (Fill in the blanks)
$300 million; $2 billion
$2 billion; $10 billion
$10 million; $300 million
$10 billion; $50 billion
Medium-cap stocks represent companies with between _______ and _______ in market capitalization. (Fill in the blanks)
$2 billion; $10 billion
$500 million; $2 billion
$10 billion; $50 billion
$100 million; $1 billion
Large-cap stocks represent companies with ________ in market capitalization.
more than $10 billion
less than $2 billion
between $2 billion and $10 billion
less than $500 million
What does the P/E Ratio (Price/Earnings Ratio) represent?
The current price of the stock divided by its earnings per share.
The total market capitalization divided by the number of shares.
The dividend yield divided by the share price.
The highest price of the stock in the last 52 weeks.
What is the formula for calculating the P/E ratio?
Earnings per share / Share price
Share price / Earnings per share
Market cap / Share price
Dividend yield / Earnings per share
The P/E ratio is calculated as ________ divided by earnings per share.
Share price
Net income
Total assets
Market capitalization
A higher P/E ratio generally indicates that investors expect higher earnings growth in the future compared to companies with a lower P/E ratio.
True
False
Fill in the blank: The annual dividend per share divided by the stock price per share is called ________.
Dividend Yield
Earnings Per Share
Price to Earnings Ratio
Book Value
What are dividends?
Penalties paid to stockholders for poor company performance.
Share of the profits paid to stockholders.
Monthly fees that stockholders pay to the company.
Loans taken by the company from stockholders.
Match the following types of investments with their explanation
Stocks
represents a fraction of the ownership of the issuing corporation
Bonds
essentially loans to a corporation or governmental body
Mutual Funds
allows you to invest in all three categories of investments with a smaller amount of money
Cash Alternatives
Includes savings accounts, money markets, CDs, guaranteed investment contracts, etc
What does it mean to buy a share of stock in a company?
Lending money to the company.
Owning a portion of the company.
Owning the company's products.
Borrowing money from the company.
What is market capitalization?
The total value of a company's outstanding bonds.
The total value of a company's assets.
The total value of a company's outstanding shares in the stock market.
The total earnings of a company in a fiscal year.
Based on the image, what is the current trading price of McDonald's stock?
$188.50
$186.75
$24.43
$1.75
What does it mean if a stock is described as "volatile"?
It pays high dividends.
Its price does not change.
It has a stable market.
Its price can change rapidly in a short period.
What is the stock market?
A place where groceries are sold.
A platform for the exchange of services.
A venue where stocks and bonds are traded.
A website for buying and selling cars.
