Stock Market
If you had invested $100 in 1965 in the 500 stocks of the S&P500 Index, how much would you have had in 2011? - $401 - $500 - $1,612 - $3,072
$1,612
How many companies are in the Dow-Jones Industrial Average? - 10 - 30 - 500 - 2000
30
The company Apple has how many shares outstanding? - 5,575 shares - 55,750 shares - 5,575,000 shares - 5,575,000,000 shares
5,575,000,000 shares
What does it mean to "diversify" your portfolio? - To 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 - A and B
A and B
What does a stock represent? - A loan you make to a company that they must pay back - A percentage of ownership of a company including assets and profits - A contract for a company's goods or services - Stocks are just tools used by investors to make money
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 - A fund used by companies to raise capital - A fund that follows an index you can buy like a stock - A type of high-interest bank account
A pool of securities you can buy as an investment
How can you tell what professional stock analysts recommend? - SeekingAlpha.com - The Analysts page of the Quotes tool - Searching for stock symbols on business websites - All of the above
All of the above
What tools does this simulator have to help you choose stocks? - Suggested Stocks lists - Current market news - Research tools with company information and quotes - All of the above
All of the above
What is an Index ETF? - An ETF that tracks a stock index, like the S&P 500 - An ETF that is based on a commodity, like gold - A place where ETFs are listed - ETFs that are all created by the same company
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 thinks Apple stock will go down in value - An investor who wants to buy gold - An investor who wants double or triple the daily return of an index - An investor who normally is not able to short-sell in their portfolio
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 a big price spike is coming soon - An investor who thinks the underlying index will slowly go up over time - An investor who wants to invest in oil - An investor who day trades
An investor who thinks the underlying index will slowly go up over time
General Electric (GE) was the longest-running member DJIA, from 1896 through 2018 (133 years). Use the "historical" tab of the quotes tool to find GE's opening stock price on December 31st, 2014. - Between $100 and $150 - Between $151 and $200 - Between $201 and $250 - $251 or more
Between $151 and $200
What makes up a "ticker symbol" in the United States? - Between 1 and 5 Letters or Numbers - The first 3 letters of a company's name - Between 1 and 5 letters only - Between 1 and 7 numbers only
Between 1 and 5 letters only
What was the most frequently traded security type in the early days of Wall Street? - Bonds - Stocks - Mutual Funds - Precious Metals (Gold, Silver)
Bonds
What is the most common winning investment strategy for new beginners? - Buy what you know - Picking hot stocks from the news - Value investing - Leveraged ETF day trading
Buy what you know
What is the DJIA named after? - DOW Chemical - Charles Dow and his statistician Mr. Jones - The name of 2 U.S. senators that wrote the bill creating the DJIA - A street near Wall Street
Charles Dow and his statistician Mr. Jones
Which of these is different between ETFs and Mutual Funds? - ETFs hold a wide basket of stocks instead of just a few - ETFs are much older than mutual funds - ETFs usually have lower fees than mutual funds - ETFs will never pay out the dividends of underlying stocks, but mutual funds will
ETFs usually have lower fees than mutual funds
What should you look for when buying stock of a company you know? - If you like their products - If your family knows someone who works there - If their stores always seem busy - If your friends all own that stock
If their stores always seem busy
What is a danger of over-diversification? - It is impossible to keep track of more than 10 stocks - If your investments are spread thin, it is hard to beat the market - Your portfolio has more risk than if you were less diversified - None of these are serious dangers
If your investments are spread thin, it is hard to beat the market
Why would you want to diversify between sectors? - To make sure you get the maximum profit when one sector goes up - In case a sector-wide event causes all stocks to drop - Because every diversified portfolio has at least one energy stock and one technology stock - Because every portfolio should have ETFs
In case a sector-wide event causes all stocks to drop
Which is a characteristic of open-ended mutual funds? - Shares trade throughout the day - There is a limit to the size of the fund - Investors typically hold fractions of shares - They are tied to a stock index and not actively managed
Investors typically hold fractions of shares
Why do investors use financial statements when conducting fundamental analysis? - It lets investors compare companies directly, apples to apples - It lets investors get a good feel for the overall market sentiment to know what other investors will do - It gives powerful insights into charts and trendlines to help see where the market is heading - Because financial statements will always give a clear picture of what the next earning's statement will say
It lets investors compare companies directly, apples to apples
Why did investors start using ticker symbols? - It was faster to move news using telegraphs with short names - Investors liked to use "Text Speak" to communicate in code - To confuse "casual" investors and keep trading to professionals - It makes it faster to look up multiple companies at a time on a computer
It was faster to move news using telegraphs with short names
How do you buy ETFs? - Like a mutual fund, trading at the end of the day - Like a stock, with the price constantly updating - Like a bond, you can buy and sell at any time but it eventually expires - You can only buy ETFs at their Initial Public Offering (IPO)
Like a stock, with the price constantly updating
If you choose a passive investing strategy, how will your portfolio look with its first allocation? - Mostly stocks of companies you know - Mostly ETFs of industries you think will grow - Mostly empty while you decide which individual stocks you want - Mostly full of stocks you heard about in the news and plan on replacing later
Mostly ETFs of industries you think will grow
What is one difference between mutual funds and ETFs? - Mutual Funds can hold more than just stocks - Mutual Funds make it easier to diversify - Mutual Funds are always easier for taxes - Mutual Funds cannot be day-traded
Mutual Funds cannot be day-traded
What is a disadvantage of mutual funds? - It is hard to diversify your portfolio using mutual funds - It costs a lot more in commissions than buying individual stocks - Mutual funds can have maintenance fees regardless of fund performance - Mutual funds are not actively managed by a professional
Mutual funds can have maintenance fees regardless of fund performance
What was the name of New York City when Wall Street was first built? - London - Jamestown - New Amsterdam - York
New Amsterdam
Where did traders in New York originally meet? - A famous coffee shop - In the room above a large pub - Outside near a buttonwood tree - In a rented office building
Outside near a buttonwood tree
What is a good way to stay diversified? - Invest only in ETFs - Invest only in Mutual Funds - Re-balance your portfolio every 3 months - These are all good ways to stay diversified
Re-balance your portfolio every 3 months
Where were stocks first created? - Egypt - Rome - London - New York
Rome
What is preferred stock? - Stock that gets paid dividends first - Stock that lets its owners vote in shareholder meetings - Stock that is always worth the most - Stock that is only owned by managers
Stock that gets paid dividends first
Over the last 30 years or so, which investment produced the highest percentage returns? - Gold - Savings Accounts - Bonds - Stocks
Stocks
Over the last 90 years, which investment produced the most volatile returns? - Gold - Savings Accounts - Bonds - Stocks
Stocks
What was the biggest event leading to stocks being the most frequently traded security type on the exchange? - The election of Abraham Lincoln - The invention of the Telegraph - Bond prices started to fall - The Industrial Revolution
The Industrial Revolution
How can you find stock news about any company? - Your local newspaper - That company's website - The Quotes page - The front page of any business news website
The Quotes page
Which of these buildings have not been located on Wall Street? - The New York Stock Exchange - The Supreme Court - The US Capitol Building - The New York City Hall
The Supreme Court
What does a stock quote represent? - A famous quote from that company's CEO - The last price a seller and buyer agreed to to make a trade - The current price/asset ratio of a stock - The current attitude professional stock analysts have towards a company
The last price a seller and buyer agreed to 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 - More people moved to New York City - The Government started trading - World War 1 started
The need for funds to finance new companies and build railroads
Which of these items can you find in a stock quote? - Current Assets - The date the stock first was sold to the public - Historical prices for a stock - The stock's current daily volume
The stock's current daily volume
What is "net change"? - The total amount a stock's price has changed since the previous trading day - The total price of a stock, in cents - The total amount a stock's price has changed since the market opened - The change in a stock's value over the last year
The total amount a stock's price has changed since the previous trading day
What does it mean if a stock is near its resistance line? - The trend suggests the stock's price will fall - The trend suggests the stock's price will rise - The trend suggests the stock's price is about to move a lot, but not clear on the direction - There is no clear trend suggested by resistance lines
The trend suggests the stock's price will fall
Why would a stock have a ".A" at the end of its ticker symbol? - There are multiple classes of stock for this company - The company has filed for bankruptcy - This stock currently has special trading rules - This would always represent "Preferred Stock"
There are multiple classes of stock for this company
What is capital preservation? - To make sure you don't lose your initial investment - To make sure you keep the gains you make investing - When companies buy back stock - It is when you use Stop orders
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 - When the government creates shares on a Stock Exchange - A new Apple product - When a company gets angry at its shareholders and has a meeting
When a company first sells shares of stock to the public
Which is one major advantage of mutual funds? - They have very low fees - You have a fund manager so you do not need to constantly monitor your investments - You can pick the companies you invest in - You get more dividends than if you held the underlying stock
You have a fund manager so you do not need to constantly monitor your investments
