Stock Market Knowledge Test

What is a stock?

• A loan to a company

• Ownership in a company

• A type of bank account

• A fixed-income security

What does it mean when a stockholder owns shares in a company?

• They are guaranteed profits

• They own a portion of the company

• They can demand dividends anytime

• They have unlimited liability

What is the primary reason companies issue stock?

• To increase product sales

• To raise money for growth and operations

• To distribute profits to employees

• To avoid paying taxes

What are the two main types of stock?

• Common and preferred

• Growth and income

• Large-cap and small-cap

• Public and private

Which of the following is a key characteristic of common stock?

• Guarantees dividends

• Provides voting rights

• Has a fixed interest rate

• Cannot be traded on the stock market

Preferred stockholders typically:

• Have voting rights in company decisions

• Receive dividends before common stockholders

• Experience higher stock price volatility

• Can only buy shares directly from the company

Where are stocks bought and sold?

• In a grocery store

• At a stock exchange

• In a bank

• At a market

What is an IPO (Initial Public Offering)?

• A) A private stock sale to executives

• B) A company's first sale of stock to the public

• C) A government-issued stock offering

• D) A stock that is only available to large investors

What is a stock ticker symbol?

• A secret investor code

• A unique abbreviation used to identify a company's stock

• The price history of a stock

• A list of a company's shareholders

What does it mean when a stock price goes up?

• The company has issued more stock

• More investors want to buy the stock than sell it

• The company is required to pay dividends

• The company has no competitors