Understanding the Stock Market Basics

Front

What is the main purpose of a stock exchange?

Back

To provide a marketplace for buying and selling stocks.

Front

What is the current trading price of McDonald's stock if it is listed as $186.75?

Back

$186.75

Front

Calculate the 3-day simple moving average of closing prices: 10, 12, and 14.

Back

$12

Front

If Henry sells 50 shares at $20 per share and pays a $10 commission, what are his net proceeds?

Back

$990

Front

Which of the following is NOT a type of stock transaction: Buying shares, Selling shares, Withdrawing cash from an ATM, Short selling?

Back

Withdrawing cash from an ATM.

Front

Define 'stock'.

Back

A stock represents a share in the ownership of a company and constitutes a claim on part of the company’s assets and earnings.

Front

What is a stock market?

Back

A stock market is a collection of markets where stocks (shares of ownership in businesses) are bought and sold.

Front

What does 'dividend' mean in the context of stocks?

Back

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.

Front

Explain 'bull market'.

Back

A bull market is a financial market in which prices are rising or are expected to rise.

Front

Explain 'bear market'.

Back

A bear market is a financial market in which prices are falling or are expected to fall.