Economics Stocks and Investing Test Mr. Fortner

What is the profit earned from selling stock called?

Capital Gain

What are the three major stock exchanges?

New York Stock Exchange, American Stock Exchange (now part of NYSE), and NASDAQ

What are the two ways one can earn a profit (money) from stocks?

1) sell a stock for a higher price than what you paid when you brought it 2) dividends received

How many shares of stock are in a lot?

100 shares of stock = 1 lot

How may stocks are in the Dow Jones Industrial Average?

30

What is a bear market?

A situation where stock market prices decline steadily over a period of time.

What is a bull market?

A situation where stock market prices rise steadily over a period of time.

What is Wall Street?

The street name has become synonymous with the US financial market.

What is a dividend?

a share of a company's profits that a stockholder receives

What do you get when you buy common stock?

a share of ownership in a corporation that gives holders voting rights (vote for board of directors at shareholders/ stockholders meeting) and a share of profits (dividends)

What is a limit order?

an order to buy stock at or below a specified price

What is a market order?

an order to buy stock at the current trading price

What is the Securities and Exchange Commission (SEC)?

it is a government agency that regulates financial markets and investment companies

What is a penny stock?

it is a stock that has a value (priced) of less than $5

What is a stock index?

it measures and reports the change in prices of a set of stocks the index may measure the entire market or some segment of the market

What is a point?

one point equals one dollar

What is an IPO (Initial Public Offering)?

the first time shares of common stock are sold publicly the stock is sold to institutional investors and not to the individual investor

What does the Dow Jones Industrial Average measure?

the overall performance of the market

Who gets the money when one buys stock?

the person you are buying the stock from the corporation only receives money from the IPO