UBIC Equity Fundamentals

What is the difference between the primary market and the secondary market?

• The primary market is where stocks are bought and sold for the first time; the secondary market is where stocks are traded after the IPO.

• The secondary market is where new companies raise money; the primary market is where stocks are listed.

• The primary market involves only bond trading, while the secondary market involves only stock trading.

• There is no difference

What is market capitalization?

• The total amount of debt a company has

• The total value of a company’s stock, calculated by multiplying stock price by shares outstanding

• The company’s profits for the year

• The amount of money raised in an IPO

What is the primary function of a stock exchange?

• To set stock prices

• To facilitate buying and selling of stocks

• To regulate the economy

• To create new stocks

What is the role of a market maker in a stock exchange?

• To set the stock prices

• To ensure there are always buyers for stocks

• To facilitate the buying and selling of stocks, ensuring liquidity

• To analyze market trends

Which of these is the best example of a major stock exchange?

• S&P500

• The New York Times

• Nasdaq

• The Federal Reserve

What is a stock ticker symbol?

• The company’s name

• The stock’s price

• The unique code used to identify a stock

• The market cap of a stock

What happens to a stock’s price when demand increases and supply stays the same?

• The price goes down

• The price goes up

• The price stays the same

• The stock is removed from trading

What does it mean when a stock is undervalued?

• The stock is priced lower than its actual worth based on fundamentals

• The stock is experiencing strong demand

• The stock is being manipulated by investors

• The stock is overpriced based on market expectations

If a company announces strong earnings, what usually happens to its stock price?

• It increases as investors see the company as more valuable

• It decreases because the company has fewer shares outstanding

• It stays the same since earnings have no effect on stock prices

• The company is forced to issue dividends

What is the difference between market price and intrinsic value?

• Market price is what the stock trades at, while intrinsic value is its true worth based on financial analysis

• Intrinsic value is the highest price a stock can reach, while market price fluctuates daily

• Market price is based on earnings, while intrinsic value is set by the government

• There is no difference; they mean the same thing