Government part 8

The two worst stock market crashes of all time occurred in and 1987, and were caused by fear.

1929

Percentage-wise, which stock market crash was worse?

1987

The AMEX ® stock symbols usually have letters

3

What type of stock simply shows that you own part of the company; it is the basic stock a company will issue?

Common

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.

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

actual number

A ________ stock is one of the safest investments you can make. The corporations are so large and powerful that they can withstand a downturn in the economy.

blue chip

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 stocks

If you purchased stocks for people, you would be known as a ________.

broker

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

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

A share of profits received by a shareholder is called a

dividend

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

dividend

In terms of the stock market, what does a "bear" believe?

down, sell

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

false

If you see a wide margin between the 52-week high and low numbers, there will be a smaller risk than with stocks that have a smaller difference between their 52-week high and low numbers.

false

People will subscribe to publications such as USA Today ® or The Baltimore Sun ® to get information on investing more wisely.

false

Preferred stock is a type of stock that is the safest you can purchase.

false

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

false

When you buy stocks, you are buying a small percentage of everything owned by the company except their computers, desks, bookshelves, and other material assets.

false

Your broker tells someone to buy six shares of Mattel ® stock for you. The person he is talking to is called the sales broker and the transaction take place on the floor of the stock market.

false

What is the MAIN cause of stock market crashes of 1929 and 1987?

fearful shareholders

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

floor of the NYSE

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

not good enough

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.

not great

You are checking up on your stocks in the newspaper. What column will tell you the amount of money from a company's profits that will be paid to you as a stockholder each year?

not high, low, and close

This exchange began in 1908. It was originally called "the curb exchange" and emerged to sell the stocks not considered reliable enough for other exchanges.

not new york stock exchange

Which stock exchange is described below? This exchange began in 1908. It was originally called "the curb exchange" and emerged to sell the stocks not considered reliable enough for other exchanges.

not nyse

When investing in a stock it is important to study both product demand and ________.

not supply

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

Jim receives a copy of a proposal for a new radio station in his town. From 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 does the actual of the stocks for you.

purchasing

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

purchasing

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

share

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 own stock, you would be known as a ________.

shareholder

If you don't see a demand for a product, it's best to be about buying stock from that company.

skeptical

Which of these words is NOT a name for a stock?

tickers

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 your:

transaction

A stock is a representation of the part of the company that you own.

true

An open mutual fund is when you put your money in the fund and the company combines your money with the money of millions of other investors, and buys stocks and bonds with it.

true

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

true

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

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

Investors' fears can become so powerful that increased movement on the stock exchange occurs, causing a financial panic.

true

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

true

NYSE ® symbols are usually one, two, or three letters.

true

Owners of preferred stock receive a fixed dividend payment.

true

Purchasing and selling has to do with the rises and dips in the market.

true

Standard & Poor's ® 500 is a type of stock index favored by professionals because it includes a wider range of public companies than the Dow Jones SM industrial average does.

true

The Dow Jones Industrial Average is a composite index of stock prices representing 30 of the nation's largest companies.

true

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

true

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

When you purchase a share, you have purchased a little piece of the company.

true

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

Your portfolio is all of the various stocks or bonds you, as an investor, hold.

true

What is NOT a question you need to ask yourself before investing in a stock?

what stock exchange is trading the stock

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

Belgium

1 Barron's 2 broker 3 broker services 4 prospectus 5 receipt 6 shareholder 7 stock ticker 8 Wall Street Journal

1 A financial weekly publication which features information on buying and selling stock 2 The person who does the actual purchasing of the stocks for you 3 Work for the shareholder done by the broker, such as selling and buying stock 4 A statement explaining the plan of a business or financial endeavor, including the financial status, the officers, recent performance, and the profits that an investor may realize. 5 Written proof that a purchase has been made 6 One who owns shares of a business on the stock exchange 7 A device which gives constant updates on the activity of the New York Stock Exchange. 8 Daily newspaper which focuses on stock market activity

1 brokerage house 2 commission 3 dip 4 floor 5 floor broker 6 rise 7 stock certificate 8 transaction

1 Initial location where stock transaction takes its first steps. Broker acts as an intermediary in the purchase 2 An amount given to a broker for his services. Sometimes it is a flat fee, other times it is a percentage 3 A drop in the market which may signify a good time to buy stocks 4 The place on the exchange where the actual selling and buying is done 5 Person who is actually in the stock exchange, and will perform the physical purchase of stock for the buyer 6 An upturn in the market which may signify a good time to sell stocks 7 A form of proof of possession of stock; mostly obsolete nowadays 8 The financial agreement and exchange of money for shares

blue chip stock common stock dividend downturn issue penny stock preferred stock

1 Safest investment; corporations involved are so powerful they can withstand a downturn in economy. 2 The most basic stock a company will issue; it carries higher risks than other stocks. 3 A share of profits received by a shareholder. 4 A dip in the market. fixed dividend payment A financial return that has a set limit. 5 The act of a company selling stock. 6 Considered the first and lowest level of stocks. They are usually going to stay small. 7 The owners of this type of stock will collect their dividends first, before the owners of common stock

climb competition demand fall open mutual fund profit retail stockholder

1 Similar to a rise in the market, signifies a good time to buy if you are looking to purchase stocks. 2 Market-wise, the rivalry existing for the consumer dollars. 3 A call for a product or service, a need or want. 4 Similar to a drop in the market, signifies a good time to sell if you have stocks. 5 Your money in the fund is combined with the money of millions of other investors to buy stocks and bonds. 6 After all expenses are subtracted, the amount of money left after a sale. 7 Selling to consumers with costs included to cover manufacturing, advertising, overhead, and other concerns. 8 Someone who has purchased stock, also known as a shareholder.

52 weeks high and low dividend high, low and close net change PE ratio per cent yield symbol volatility volume

1 Stock's volatility. Greater the margin between the two numbers, greater the risk for stock to gain or lose. 2 A share of profits received by a shareholder 3 The activity the day before; the highest price and lowest price of the stock, along with the closing price. 4 The change of the price of the stock from the previous day 5 Price-earnings ratio; relationship between price of stock and earnings made in the entire year 6 Tells you how much of the price of the stock you will be paid in dividends by the end of the year 7 A one to four character symbol that is a kind of nickname for the company 8 The risk and profit potential of a particular stock 9 The number of stocks that were traded on the previous day

1 American Stock Exchange 2 bond 3 curb trading 4 Industrial Revolution 5 New York Stock Exchange 6 share 7 stock exchange 8 Wall Street

1 The formal name of the curb traders; the AMEX, as it is known, began in 1908. 2 Certificate guaranteed that the original investment will be paid with interest at a specified date. 3 Trading which began on the street curb because the NYSE turned down certain stocks. 4 Growth in America in mid-19th century; emphasis moved from farming to manufacturing. 5 The largest of all American stock exchanges, created in 1792. 6 A unit of the equal parts of the capital stock divided by a corporation. 7 A place where financial securities are bought and sold. 8 Where the New York Stock Exchange originated; still the meeting place of the NYSE.

correction crash 1929 crash financial panic financial section October 19,1987 plunge points

1 When the market is trying to steady itself out after a monumental movement. 2 The stock market events of 1929; investors lost millions of dollars due to a stock market that kept falling. 3 Brought on the Great Depression which hurt countries all over the world during the 1930s. 4 Investors' fears become so powerful that increased movement on the stock exchange occurs. 5 The segment of the newspaper which gives analysis and information about the stock market. 7 One of the most significant days of stock market panic in its history; the NYSE fell 508 points in one day. 8 A significant drop in the market that is more exaggerated than the normal dips that would take place. 9 A standard unit of value in the stock market, equal to $1 a share.

From its humble origins of the , the stock market in America has grown to be a financial force in the world today.

1700's

You are checking up on your stocks in the newspaper. What column will tell you the volatility or risk and profit potential of a particular stock?

52 weeks high and low

Which statements are TRUE?

If the company has been making a good profit against competition, you may continue to see that profit grow, and that is a good sign for investing Putting money into stocks is a risky thing.

TRUE

The New York Stock Exchange ® is also known by its initials, NYSE ® . England's first stock exchange originated in 1773. 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 shortly after the American Revolution.

Which statement is NOT TRUE?

The first stock exchange was the New York Stock Exchange ® .

The activity 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 , so if you want to get the actual number of stocks traded, simply multiply the volume number by .

hundreds, one hundred

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

more harsh

Millions of people purchase , which is an easy way to have a professional buy stocks for them.

mutual funds

Millions of people purchase which give the freedom to a professional to purchase stocks and control the money given to him.

mutual funds

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

not good enough

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.

not good enough