The Stock Market Flashcards
What is the stock market?
A marketplace where shares of publicly traded companies are bought and sold.
True or False: The stock market only includes stocks.
False
Fill in the blank: A _____ is a financial instrument representing ownership in a company.
share
What is a stock exchange?
A venue where stock brokers and traders can buy and sell securities.
Name one major stock exchange in the United States.
New York Stock Exchange (NYSE)
What does IPO stand for?
Initial Public Offering
True or False: A company’s stock price is determined solely by its earnings.
False
What is a bull market?
A market condition where prices are rising or are expected to rise.
What is a bear market?
A market condition where prices are falling or are expected to fall.
What is market capitalization?
The total market value of a company’s outstanding shares of stock.
Fill in the blank: The _____ is a measure of a company’s financial performance.
earnings
What does the term ‘dividend’ refer to?
A portion of a company’s earnings distributed to shareholders.
What is the purpose of a stockbroker?
To facilitate the buying and selling of stocks on behalf of clients.
True or False: Stocks are considered a low-risk investment.
False
What is a stock index?
A measurement of a section of the stock market, representing a portfolio of stocks.
Name one well-known stock index.
S&P 500
What does it mean to ‘short sell’ a stock?
To sell shares you do not own, with the intention of buying them back at a lower price.
What is the difference between common stock and preferred stock?
Common stock typically allows voting rights, while preferred stock usually offers fixed dividends.
Fill in the blank: The _____ is the price at which a stock is bought or sold.
market price
What is an exchange-traded fund (ETF)?
A type of fund that owns underlying assets and divides ownership into shares that are traded on stock exchanges.
True or False: Only institutional investors can participate in the stock market.
False
What is a limit order?
An order to buy or sell a stock at a specified price or better.
What does ‘liquidity’ refer to in the context of the stock market?
The ease with which assets can be converted into cash without affecting their market price.
What is a market order?
An order to buy or sell a stock immediately at the current market price.
