Introduction to the Stock Market

Common stock is more prone to rapid changes; therefore, there is more risk associated.

• True
• False

People who invest in the stock market will automatically make money.

• True
• False

If a company issues dividends, preferred stock holders are paid the dividends first.

• True
• False

A dividend is a portion of the company's profits paid to its shareholders.

• True
• False

Publicly held corporations

• have shares of stock that are held by public (outside) investors
• are not-for-profit organizations
• are listed first on the New York Stock Exchange
• guarantee a positive return to investors

Which of the following is your right as a shareholder of common stock?

• the right to hire officers of the corporation
• the right to dividends if paid

Mutual funds are:

• an investment portfolio managed by the investor
• an investment that holds a wide range of different investment instruments, providing diversification
• usually less risky than investing in a money market
• guaranteed to increase in value

Publicly held corporations

• have shares of stock that are held by public (outside) investors
• are not-for-profit organizations
• are listed first on the New York Stock Exchange
• guarantee a positive return to investors

The NYSE is an exchange where daily auctions (the biding of stocks) determine the price for thousands of different stocks.

• True
• False

What is the goal of an investor?

• Buy low and sell high
• Keep a stock for their entire life
• Open a new investment account
• Help a company get bigger