Understanding the Stock Market

What is the stock market?

• A place where stocks and other securities are bought and sold

• A type of grocery store specializing in stocks

• A market where only government bonds are traded

• A place where only commodities like gold and silver are exchanged

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

• Provides loans to companies

• Allows companies to raise money by selling shares to investors

• Manufactures goods

• Offers insurance policies

Which of the following are major stock exchanges?

• London Stock Exchange

• New York Stock Exchange (NYSE)

• NASDAQ

• Tokyo Stock Exchange

Fill in the blank: A small piece of ownership in a company is called a _______.

• Stock

• Bond

• Dividend

• Asset

Fill in the blank: Money paid to shareholders from company profits is called a _______.

• Dividend

• Interest

• Capital Gain

• Revenue

How do companies "go public"?

• By offering stocks through Initial Public Offerings (IPOs)

• By buying stocks from other companies

• By selling bonds to investors

• By merging with other companies.

Investors buy and sell stocks through ________.

• stock exchanges

• grocery stores

• real estate agents

• car dealerships

What causes stock prices to change?

• A) Government regulations

• B) Supply and demand

• C) Company mergers

• D) Tax policies

List the factors affecting stock prices.

• company performance, economic conditions, news

• weather patterns, lunar phases, ocean tides

• astrological signs, personal opinions, random guesses

• color of the stock ticker, font size of the news, time of day

Who are individual investors?

• Large organizations

• Professionals who buy and sell stocks for clients

• People who buy stocks for personal investment

• Ensure there are always buyers and sellers for stocks