Stock Market

Question 1

Public Companies

Answer 1

Company whose shareholders have a claim to part of its assets & profits

The company’s securities trade on public markets

The company discloses business and financial info regularly to the public

Question 2

NYSE

Answer 2

Broker Market

Buyer purchases securities directly from seller through a broker

Question 2

Major Secondary Markets

Answer 2

NYSE and NASDAQ

Question 3

NASDAQ

Answer 3

Dealer Market

Use telecom networks to link dealers throughout the US. NOT direct trade.

Selling investor sells securities to one dealer

Buyer purchases securities from another/same dealer

Question 4

Market Capitalization

Answer 4

Total value of all a company’s shares of stock (Price of 1 stock x Total # of Shares)

Question 5

Major Indices

Answer 5

S&P 500 (500 stocks)

Dow Jones Industrial Average (30 stocks)

Nasdaq Composite (2500+ stocks)

Question 6

Percent Change Formula

Answer 6

(New Price - Old Price) / Old Price x 100

Question 7

Mutual Funds

Answer 7

A financial service company that pools investors’ funds to buy securities.

Are net asset values (prices calculated once, at end of trading day (4:00 PM))

Question 8

Exchange Traded Funds (ETF)

Answer 8

Like MF’s, but traded on stock exchanges à prices change throughout the day

Very low expense rations

Require investors to pay in comms. to buy/sell ETF shares