E&EL MP2 Q2
What's an IPO?
(Initial Public Offering) When a company first sells shares of stock to the public
The company Apple has how many shares outstanding?
5,575,000,000
In our example, what would be the Quantity Demanded at a market price of $20?
7
What does a stock represent?
A percentage of ownership of a company including assets and profits
What is a mutual fund?
A pool of securities you can buy as an investment
What is an index ETF?
An ETF that tracks a stock index, like the S&P 500
Who would be the most likely to buy an inverse ETF?
An investor who normally is not able to short-sell in their portfolio
Who would be the least likely to buy a leveraged ETF?
An investor who thinks the underlying index will slowly go up or down
What makes up a "Ticker Symbol" in the United States?
Between 1 and 5 letters only
What investment is similar to the first paper money?
Certificates of Deposit
Which of these is different between ETFs and mutual funds?
ETFs usually have lower fees than mutual funds
What is an ETF?
Exchange Traded Fund
What is a GDP?
Gross Domestic Product
Why did investors start using ticker symbols?
It was faster to move news along telegraphs with short names
How would you buy an ETF?
Like a stock, with the price constantly updating
Why does the quantity of supplied stock go up when prices go up?
More current owners are willing to sell their shares at a high price
What does it mean when payroll employment and unemployment both increase?
More people entered the labor force than jobs were created
What is a disadvantage of Mutual Funds?
Mutual Funds can have maintenance fees regardless of fund performances
What is one difference between Mutual Funds and ETFs?
Mutual Funds cannot be day-traded
Where were stocks first created?
Rome
What is NOT a characteristic of Open-Ended Mutual Funds?
Shares trade throughout the day
What is preferred stock?
Stock that gets paid dividends first
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
"Market Equilibrium" is...
The price range where the quantity supplied equals the quantity demanded
What does a GDP do?
The total value of all finished goods and services produced by a country
When the economy inflates....
The unemployment rate goes down
When the economy contracts....
The unemployment rate goes up
Why would a stock have ".A" at the end of its ticker symbol?
There are multiple classes of stock for this company
What do economies do?
They inflate and contract
How do researchers calculate the Consumer Price Index?
They watch the prices of a large group of consumer goods around the country
Why do we want to maximize the Total Surplus?
This generates the biggest benefit to share between buyers and sellers
Why do Reserve Requirements exist?
To make sure that banks have enough cash to serve customers who want to withdraw
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 the currency in the United States backed by?
debt
