Financial Literacy Test

A tombstone ad is prepared for companies that are facing bankruptcy and financial failure

False

If it possible for shareholders to lose money in addition to the amount they invested, if a company fails

False

Investment bankers buy shares of stock on the same type of market that the general public does

False

Profits represent ownership of shares of a company

False

Risk is only associated with the purchase of common stocks

False

The general public buys new issues of stock on the primary market

False

People who invest in the stock market will automatically make money

True

Preferred stock means the company is preferred over other companies in a particular industry

True

Shareholders can only make money by collecting dividends

True

You can only buy stock in publicly held companies

True

A dividend is a portion of the company's profits paid to its share holders

Truth

A person who is 25 should not be willing to take the same amount of risk when investing as someone who is 55

Truth