MVC

Question 1

Stock

Answer 1

Represents ownership in a company. Your ownership in the company is determined by the amount of shares you own divided by the amount of outstanding shares. The goal is to buy shares and eventually sell them for a greater value which equates to profits.

Question 2

Bid

Answer 2

A bid is an offer made by an investor, trader, or dealer in an effort to buy a security, commodity, or currency.

Question 3

Ask

Answer 3

The ask is the price a SELLER is willing to accept for a security, which is often referred to as the offer price.

Question 4

Bullish

Answer 4

This is a positive sentiment. Analysts and investors believe the stock market overall will move higher and stocks will appreciate in value.

Question 5

Bearish

Answer 5

This is negative sentiment. Analysts and investors believe the stock market overall will move lower and stocks will depreciate in value.

Question 6

Mutual Fund

Answer 6

A fund that contains a various amount of shares for the purpose of diversity. Many mutual funds are actively managed in which allocation can be changed at the manager’s discretion. An expense ration applies which is paid to the manager and administration of the fund.

Question 7

Bond

Answer 7

Shares of bond represents what is owed to you. IT can also be referred to as fixed income. With a bond, this is a loan to a company or entity in which you are paid back your principal plus interest that is determined at the time of purchase.

Question 8

Market capitalization

Answer 8

This is calculated by multiplying the amount of outstanding shares time the price of the stock. Typically larger companies have a capitalization greater than a billion dollars.

Question 9

Asset allocation

Answer 9

How are your assets are divided up between stocks, bonds, cash, and alternatives (options, commodities, etc). More risky portfolios will have greater amount of stocks. Less risk means more bonds or cash.

Question 10

ETF (Exchange Traded Fund)

Answer 10

A fund that often mirrors a selected index. This isn’t actively managed and therefore has a much lower expense ratio than a mutual fund.

Question 11

Index

Answer 11

S&P 500 (Standard & Poor’s), NASDAQ, Dow Jones. These are popular indexes which are a group of stocks of various characteristics. These characteristics may include size of the company, industry, etc.

Question 12

Options

Answer 12

An options contract offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset.

Options contracts usually represent 100 shares of the company, and the buyer will pay a premium fee for each contract. For example, if an option has a premium of 35 cents per contract, buying one option would cost $35 ($0.35 x 100 = $35). The premium is partially based on the strike price—the price for buying or selling the security until the expiration date.

Question 13

Put Options

Answer 13

allow the holder to SELL the asset at a stated price within a specific time-frame.

Question 14

Call Options

Answer 14

allow the holder to BUY the asset at a stated price within a specific time-frame.

Question 15

Prospectus

Answer 15

This is an information guide that is available for any ETF and mutual fund you purchase. This has information that includes the fund’s manager, allocation, objective of the fund, expense ration, and more.

Question 16

Capital gain/loss

Answer 16

This is determined when you sell shares of a stock or fund. You calculate this by subtracting the price the asset was purchased from the price it was sold at. If it is a positive number, that is a capital gain. If it is a negative number, that is a capital loss.

Question 17

Annual Report

Answer 17

A report prepared by a company that’s intended to impress shareholders. It contains tons of information about the company, from its cash flow to its management strategy. When you read an annual report, you’re judging the company’s financial situation.

Question 18

Bear Market

Answer 18

The stock market being in a downward trend

Question 19

Blue Chip Stocks

Answer 19

The stocks behind large, industry-leading companies. They offer a stable record of significant dividend payments and have a reputation of sound fiscal management. Like Apple, Amazon, Walmart, Google.etc.

Question 20

Bull Market

Answer 20

When the stock market as a whole is in a prolonged period of increasing stock prices.

Question 21

Broker

Answer 21

A person who buys or sells an investment for you in exchange for a fee (a commission).

Question 22

Close

Answer 22

The NYSE and Nasdaq close at 4 p.m., with after-hours trading continuing until 8 p.m. The close simply refers to the time at which a stock exchange closes to trading.

Question 23

Day Trading

Answer 23

The practice of buying and selling within the same trading day, before the close of the markets on that day, is called day trading.

Question 24

Exchange

Answer 24

A place in which different investments are traded. The most well-known exchanges in the United States are the New York Stock Exchange (NYSE) and Nasdaq.

Question 25

Execution

Answer 25

When an order to buy or sell has been completed, the trader has executed the transaction. If you put in an order to sell 100 shares, this means that all 100 shares have been sold.

Question 26

High

Answer 26

A high refers to a market milestone in which a stock or index reaches a greater price point than previously

Question 27

Initial Public Offering (IPO)

Answer 27

An IPO is the first sale or offering of stock by a company to the public. It happens when a company decides to go public rather than remain solely owned by private or inside investors.

Question 28

Low

Answer 28

It represents a lower price point for a stock or index.

Question 29

Margin

Answer 29

A margin account lets a person borrow money (take out a loan, essentially) from a broker to purchase an investment. The difference between the amount of the loan and the price of the securities is called the margin.

Question 30

Open

Answer 30

In the United States, the stock market opens at 9:30 a.m.

Question 31

Order

Answer 31

An investor’s bid to buy or sell a certain amount of stock or option contracts constitutes an order. You have to put an order in to buy or sell 100 shares of stock, for instance.

Question 32

Pink Sheet Stocks

Answer 32

The term “pink sheets” refers most commonly to penny stocks, which are traded at $5 per share or less

Question 33

Portfolio

Answer 33

A collection of investments owned by an investor makes up his or her portfolio.

Question 34

Quote

Answer 34

Information on a stock’s latest trading price tells you its quote.

Question 35

Rally

Answer 35

A rapid increase in the general price level of the market or of the price of a stock is known as a rally.

Question 36

Sector

Answer 36

A group of stocks that are in the same industry belong to the same sector. An example would be the technology sector, which includes companies like Apple and Microsoft.

Question 37

Short Selling

Answer 37

When you short-sell a stock, you borrow shares from someone else with the promise to return them at a point down the road. You then sell the stock for a profit. It’s a way to take advantage of a stock that you believe will decrease in price.

Question 38

Spread

Answer 38

This is the difference between the bid and the ask prices of a stock, or the amount for which someone is willing to buy it and the amount for which someone is willing to sell it. For instance, if a trader is willing to trade Z stock for $10 and a buyer is willing to pay $9 for it, the spread is $1.

Question 39

Stock Symbol

Answer 39

A stock symbol is a one- to four-character alphabetic root symbol that represents a publicly traded company on a stock exchange.

Question 40

Volatility

Answer 40

The price movements of a stock or the stock market as a whole.

Question 41

Volume

Answer 41

The number of shares of stock traded during a particular time period, normally measured in average daily trading volume.