Introduction to Stock Market Basics

What is a stock?

• A type of bond issued by companies

• A share in the ownership of a company

• A government-issued security

• A type of mutual fund

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Which of the following is a primary function of the stock market?

• To provide loans to businesses

• To facilitate the buying and selling of stocks

• To regulate interest rates

• To issue currency

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What does the term "dividend" refer to in the stock market?

• The interest paid on bonds

• The profit distributed to shareholders

• The fee charged by brokers

• The tax on stock transactions

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Which of the following best describes a "bull market"?

• A market where stock prices are falling

• A market where stock prices are rising

• A market with no significant price changes

• A market dominated by government bonds

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What is the primary purpose of an Initial Public Offering (IPO)?

• To allow a company to become publicly traded

• To increase the company's debt

• To merge with another company

• To close the company

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Which of the following is a stock index?

• NASDAQ

• Federal Reserve

• World Bank

• IMF

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What does the term "portfolio" refer to in the context of the stock market?

• A collection of financial assets

• A type of stock

• A stock market crash

• A government bond

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Which of the following is a characteristic of a "bear market"?

• Rising stock prices

• Falling stock prices

• Stable stock prices

• Increasing dividends

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What is a "stock exchange"?

• A place where stocks are bought and sold

• A type of mutual fund

• A government agency

• A financial advisor

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What does the term "market capitalization" mean?

• The total value of a company's outstanding shares

• The interest rate set by the central bank

• The total amount of dividends paid by a company

• The number of shares a company has issued

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