Economics Unit 8

____ was the year in which the Stock Market crash started the Great Depression after an incredible plunge which made millionaires poor in the space of hours.

1929

The record-breaking, dead-bottom low did not come until July ____, as the market had lost approximately __% of its value.

1932, 89

"The Curb Exchange" continued to grow and was renamed the American Stock Exchange, also known as ____.

AMEX

The very first stock exchange was created in 1531 in Antwerp, _______.

Belgium

_____________ are the safest stock investment you can make, since these corporations are so large and powerful they can withstand a downturn in the economy.

Blue chip stock

Give the two examples provided that represent a blue chip stock: ______ and ____.

Boeing, AT&T

T/F: A transaction is written proof that a purchase has been made.

False

T/F: AMEX is another name for the Standard & Poor index.

False

T/F: If you do not see any profit from the company recently, that us a sign it may be a good business for investment.

False

T/F: If you see a wide margin between the high and low numbers, you can tell that there will be a smaller risk than with other stocks which have a large difference between their numbers in that column.

False

T/F: If you want to buy shares in Mattel Toys, you run down to the Toys"R"Us and tell them you want twenty shares of Mattel.

False

T/F: Purchasing and selling should take into account the government trading on the market.

False

T/F: The Wall Street Journal actually added to the fears of people in 1929 by reporting in an irresponsible manner about unfound fears

False

T/F: The Wall Street Journal actually added to the fears of people in 1929 by reporting in an irresponsible manner about unfound fears.

False

T/F: The Wall Street Journal is the monthly newspaper which focuses on stock market activity.

False

T/F: Traders would meet on what was once a farmer's market area known as Fisherman's Wharf in New York.

False

T/F: Your portfolio is all of the various stocks or bonds your broker cannot allow you to purchase.

False

After the ____________________, Wall Street became more important and the New York Stock Exchange was getting all the business it could handle.

Industrial Revolution

T/F: A broker is the person who will do the actual purchasing of the stocks for you.

True

T/F: A prospectus is a plan of a new business or financial endeavor, including how much capital is needed in order to be a shareholder and the profits that an investor may realize.

True

T/F: A prospectus is a plan of a new business or financial endeavor, including how much capital is needed in order to be a shareholder.

True

T/F: An open mutual fund is when you put your money in the fund and the company combines that money with the money of millions of other investing people and buy stocks and bonds with it.

True

T/F: Buying stock should be equated with buying into a partnership of a business -- after all, your money is going into a corporation that will try to use it to grow.

True

T/F: England's first stock exchange originated in 1773.

True

T/F: First, all the common stock in a company must be issued. Then the company will begin to issue preferred stock.

True

T/F: From its humble origins of the 1700s, the stock market in America has grown to be a major financial force in the world today.

True

T/F: If the company has been making a good profit against competition, you may continue to see that profit from and that is a good sign for investing.

True

T/F: In reality, both crashes were started by people who had one thing in mind: embezzlement.

True

T/F: In the early days of America, the Colonial government was looking for a way to finance its wartime operations, so it sold bonds.

True

T/F: In the early days of our nation, the Colonial government was looking for a way to finance its wartime operations, so it sold bonds.

True

T/F: Investors' fears become so powerful that increased movement on the stock exchange occurs, causing a financial panic.

True

T/F: Mattel, as well as thousands of other companies, offers the opportunity to buy a part of their company by selling shares.

True

T/F: People will subscribe to publications such as Barron's or The Wall Street Journal to get information on investing more wisely.

True

T/F: Preferred stock is the type of stock that is the safest you can purchase.

True

T/F: Purchasing and selling should take into account the rises and dips in the market.

True

T/F: Putting money into stocks is a risky thing.

True

T/F: The AMEX stock symbols usually have 3 letters.

True

T/F: The New York Stock Exchange began with a handful of men standing in front of a buttonwood tree near the Trinity Church in East Manhattan during the American Revolution.

True

T/F: The New York Stock Exchange is also known by its initials, NYSE.

True

T/F: Volatility gives you an idea of the risk and profit potential of that particular stock.

True

T/F: When you buy stocks, you are buying a small percentage of everything owned by the company. This includes computers, desks, and bookshelves, among other things.

True

T/F: When you purchase a share, you have purchased a little piece of the company.

True

T/F: When you see the volume figure, you are looking at the amount of stock that were traded on a given day.

True

T/F: When you see the volume figure, you are looking at the amount of stocks that were traded on a given day.

True

T/F: Your broker tells someone to buy six shares of Mattel stock for you. The person he is talking to is called the floor broker and the transaction takes place on the floor of the stock market.

True

A floor ______ is just like the people you see on the news clips on television when they show a bunch of people frantically waving their arms and dropping paper all over the floor.

broker

In the 1700s, the first banks in American history were being created and once again ____ was needed to make the start successful.

cash

A _____ is similar to a rise in the market and signifies a good time to buy if you are looking to purchase stocks.

climb

When selling your stock, you would call the broker and the process would go almost the same way. The broker will deduct his __________ and then pass the money on to you.

commission

There is more of a risk with ______ stock and the gains and losses of a company directly affect the ______ stock. You get a high chance of making a profit with ______ stock.

common, common, common

Another question to ask yourself is: How has the company been doing against its ___________?

competition

_____ is the term used for the stock market events of 1929 in which investors lost millions of dollars due to a stock market that kept falling.

crash

By looking at the net change, you can see the change of the price of the stock during the ___. You can learn whether the price has been rising or dropping.

day

A share of profits received by a shareholder is called a ________.

dividend

A price-earnings ratio is figured out by calculating the relationship between the price of the company's stock and the ________ a company makes in the entire ____. It is figured out by dividing the closing price of a stock by the earnings per share of each stock.

earnings, year

When you call a broker and arrange to buy stock, the broker calls a person on the floor of the exchange, probably an ________ of his.

employee

What are four examples of different names for stocks?

equities, issues, securities, shares

When you told the broker you wanted to get those six shares of Mattel stock, he sent a message to a person who is working on the _____ of the New York Stock Exchange.

floor

When you enter the business world of purchasing stocks, you must realize that this is not ________.

gambling

Buying stock should be equated with buying into a partnership of a business - after all, your money is going into a corporation that will try to use it to ____.

grow

The activity of the day before; the highest price, and lowest price of the stock, along with the closing price at the end of the business day will be noted on the stock page as _______________.

high, low, and close

The volume number is given in the ________.

hundreds

In a 52 weeks high and low, if the numbers show _____ difference between each other, there is less risk of loss -- but there is also less opportunity for gain, either.

little

One of the first rules that almost any investor will tell you is: Do not invest any money that you can't afford to ____.

lose

When reading the 52 weeks high and low, the greater the ______ between the two numbers, the greater the ____ stock to gain or lose money for the investor.

margin, risk

In order to get a professional to purchase stocks and control the money given to him, millions of people purchase ___________.

mutual funds

The change of the price of the stock on a given day is known as the ___ change.

net

If you want to get the actual number of stocks traded, simply multiply the volume number by __________.

one hundred

A standard unit of value in the stock market is a _____.

point

By looking at the net change, you can see the change of the _____ of the stock during a given day. You can learn whether the _____ has been rising or dropping.

price, price

A question to ask before you invest your money is: Is the company making a _______ or service that somebody wants?

product

After all expenses are subtracted, the amount of money left after a sale is called a ______.

profit

Jim receives a copy of a new radio station being proposed in his town. Within the information he learns the potential for profits, the risk involved and how much capital is needed in order to become a shareholder. Jim is looking at a _________.

prospectus

A broker is the person who will do the actual __________ of the stocks for you.

purchasing

After the broker has called the floor broker, the floor broker goes to the area allotted for that particular stock. He buys the amount of stock from the company. He _______ it on the floor and then back to your brokerage _____. The stock is now yours.

reports, house

Volatility gives you an idea of the ____ and profit potential of that particular stock.

risk

When a broker tells you, "Well, right now a share in Mattel Toys is going for 10 dollars, but my ________ will cost you 40 dollars, so you can buy six shares of Mattel."

services

A unit of the equal parts of the capital stock divided by a corporation is called a _____.

share

In addition to bonds, the banks sold little parts of their banks to whoever had the money and the desire to own a _____ in the business.

share

If you do not see a demand for a product, it is best to be ________ about buying stock from that company.

skeptical

When you buy stock, you will be referred to as a shareholder or ___________.

stockholder

The floor broker purchases your six shares of Mattel and then reports the trade to the floor. That means that hundreds of computers all over the NYSE have recorded you ___________.

transaction

Some of the stocks offered to get on the NYSE were __________ to be put in the NYSE, so a brisk business was running outside on the curb of the street.

unreliable

The 52 weeks high and low will tell you about the __________ of a stock. If the numbers show little difference between each other, there is less risk of loss - but there is also less opportunity for gain, either.

volatility

Percentage-wise, the 1987 stock market crash was _____ than the 1929 crash.

worse

Look closely at the volume number - if a tiny ___ is shown before the number, the volume is not given in hundreds but is the actual number of stocks traded.

z