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?

    <p>The overall market's health</p> Signup and view all the answers

    What do bull markets indicate?

    <p>Periods of rising stock prices</p> Signup and view all the answers

    What is the purpose of the stock market?

    <p>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.</p> Signup and view all the answers

    What is the definition of stocks?

    <p>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.</p> Signup and view all the answers

    Name two examples of stock exchanges.

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

    What factors influence the price of a stock?

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

    What do bear markets indicate?

    <p>Bear markets indicate periods of declining stock prices.</p> Signup and view all the answers

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