Economics Unit 6 Quiz #1

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

Why would you want to diversify between sectors of the economy?

In case a sector-wide event causes all stocks to drop

In the late 1800s, what factors led to the growth of the New York Stock Exchange?

The need for funds to finance new companies and build railroads

In terms of diversification, what is "capital preservation"?

To make sure you don't lose your initial investment

What is an IPO?

When a company first sells shares of stock to the public

What makes up a "ticker symbol" in the United States?

between one and five letters only

Why did investors start using ticker symbols?

it was faster to move news using telegraphs with short names