Stocks Test
What was the combined Total Liabilities for Apple in September 2014?
$120,292,000
Use the Quote tool to find the balance sheet for Apple (AAPL). What was their cash balance in September of 2015?
$21,120,000
If you had invested $100 in 1965 in the 500 stocks of the S&P500 Index, how much would you have had in 2011
$6,072
What does an Income Statement represent?
the total revenue and expenses a company used to do business over a period of time
Why would a stock have a ".A" at the end of its ticker symbol?
there are multiple classes of the stock for this company
What happens if banks do not have enough cash to stratify their reserve requirements at the end of the day?
they must borrow from the Federal Reserve or another bank
Why do we want to maximize the Total Surplus?
this generates the biggest benefit to share between buyers and sellers
What is capital preservation?
to make sure you don't loose your initial investment
Which of these does not appear on a balance sheet?
total revenue from the previous year
Why did margin trading cause so many problem?
when stocks used as collateral started to lose value, brokers forced borrowers to pay back loans immediately
Which is one major advantage of Mutual Funds?
you have a fund manager so you do not need to constantly monitor your investments
What is a preferred stock?
A stock that gets paid dividends first
What is an Index ETF?
an ETF that tracks a stock index, like the S&P 500
How many companies are in the Dow-Jones Industrial Average?
30
The company Apple has how many shares outstanding?
5,575,000,000
In our example, what would be the Quantity Demanded at the market price of $20 ?
7
What does it mean to diversify your portfolio?
hold more than 1 stock, for your stocks to not be all in the same area of the economy, to have a mix between stocks, mutual funds, or other securities (all of the above)
What should you look for when buying stock of a company you know?
if their stores always seem busy
Why would you want to diversify between sectors?
in case a sector-wide event causes all stocks to drop
Why do investors pay close attention to income statements?
it is an accurate snapshot of a company's performance over a specific period of time
What was the most frequent traded security type in the early days of Wall Street
Bonds
What is the DJIA named after?
Charles Dow and his Statistician Mr. Jones
Which of these is different between ETFs and Mutual Funds?
ETFs usually have lower fees than mutual funds.
What is a danger of over-diversification?
If your investments are spread thin, it is hard to beat the market
What was the name of New York City when Wall Street was first built?
New Amsterdam
Where were stocks first created?
Rome
What is an IPO?
When a company first sells shares of a stock to the public.
What does a Balance Sheet represent?
a companies total assets and liabilities on a certain date
What does a stock represent?
a percentage of ownsership of a company including assets and profits
What is a Mutual Fund?
a pool of securities you can buy as an investment
Who would be most likely to buy an Inverse ETF?
an investor who normally is not able to short-sell their portfolio.
Who would be the least likely to buy a Leveraged ETF?
an investor who thinks the underlying index will slowly go up over time.
General Electric (GE) is the only original component still in the DJIA
between $25 and $26.99
What makes up a "Ticker Symbol" in the United States?
between 1 and 5 letters
What is the most common investment strategy for new beginners?
buy what you know
What is the main job of the federal reserve?
controlling inflation and increasing employment (both a and b)
What do "Prepaid Expenses" count toward?
current assets
Why did investors start using ticker symbols?
it was faster to move news using telegraphs with short names
How do you buy ETFs?
like a stock, with the price constantly updating
Why does the quantity supplied of stock go up when prices go up?
more current owners are willing to sell their shares at a high price
What is a disadvantage of Mutual Funds?
mutual funds can have maintenance fees regardless of fund performance.
What is the different between Mutual Funds and ETFs?
mutual funds cannot be day-traded.
What does the "Bottom Line" refer to?
net income
Which of these is NOT one of the causes of the stock crash?
new technologies made many old companies to fail
Where did traders in New York originally meet?
outside near a buttonwood tree
Why are there two Federal Reserve Banks in Missouri?
politics
Why is speculative trading dangerous
prices become based on hype instead of value of the company, and so are likely to crash
What is a good way to stay diversified?
re-balance your portfolio every 3 months
What is not a characteristic of Open-Ended Mutual funds?
shares trade throughout the day.
Over the last 30 years or so, which investment produces the highest percentage returns?
stocks
Over the last 90 years, which investment produced the most volatile returns?
stocks
What tools does HowTheMarketWorks have to help you choose stocks?
suggested stock lists, current market news, research tools with company information and quotes (all the above)
What is "Consumer Surplus?"
the "profit" a buyer gets the difference between what they had to pay and the most they would be willing to pay in a trade
How can you tell what professional stock analytics recommend?
the Chaikin Analytics tool on the trading page, the Analytics page of the quotes tool, searching for stock symbols on business websites (all the above)
How can you find stock news on any company?
the Quotes on the HowTheMarketWorks page
Which of these building have not been located on Wall Street
the Supreme Court
What was the biggest event leading to stocks being the most frequent traded security type?
the industrial revolution
What does a Stock Quote represent?
the last price a seller and buyer agreed to make a trade
In the late 1800s, what factors led to the growth of the NYSE?
the need for funds to finance new companies and build railroads.
"Market Equilibrium" is
the price range where the quantity supplied equals the quantity demanded
Which of these items can you find in a stock quote?
the stock's current daily volume
What is "Net Change?"
the total amount a stock's price has changed since the previous trading day