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Stock Market Basics

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Questions and Answers

Which of the following best describes stocks?

A form of currency used in the stock market
Financial instruments used to buy and sell commodities
Ownership in a company divided into shares (correct)
Investments that guarantee a fixed return

What are stock exchanges?

Platforms where investors lend money to companies
Institutions that regulate the stock market
Markets where stocks are bought and sold (correct)
Markets where commodities are bought and sold

What influences the price of a stock?

Investor sentiment
Interest rates
Political events
Company's profit margin (correct)

What do stock indices track?

The overall market's health (B) Signup and view all the answers

What do bull markets indicate?

Periods of rising stock prices (D) Signup and view all the answers

What is the purpose of the stock market?

The purpose of the stock market is to provide a platform for investors to buy and sell shares of publicly-traded companies, allowing companies to raise capital by selling ownership stakes (shares) to the public. Signup and view all the answers

What is the definition of stocks?

Stocks represent ownership in a company and are divided into shares. Owning shares means you have a partial ownership interest and can potentially benefit from the company's profits. Signup and view all the answers

Name two examples of stock exchanges.

Two examples of stock exchanges are the New York Stock Exchange (NYSE) and the Nasdaq. Signup and view all the answers

What factors influence the price of a stock?

The price of a stock is determined by supply and demand, influenced by factors like company performance, economic conditions, and investor sentiment. Signup and view all the answers