Stock Market Basics Quiz

Stock Market Basics

• A rising stock price typically indicates a positive perception of the company's future performance, increasing demand, and/or lower supply of the stock.

Functions of a Stock Market

• The primary function of a stock market is to provide a platform for buying and selling shares of publicly traded companies, facilitating the transfer of ownership and enabling price discovery.

Initial Public Offering (IPO)

• An IPO is the first sale of a company's stock to the public, allowing the company to raise capital, increase its visibility, and provide liquidity to its investors.

Factors Influencing Stock Prices

• weather forecasts do not typically influence stock prices, whereas factors like economic indicators, company performance, and global events do.

Short Interest Ratio

• The short interest ratio is a measure of market sentiment, representing the ratio of shares being short sold (betting against a stock's price rise) to the total shares outstanding.

Stock Index

• The primary purpose of a stock index is to track the performance of a particular segment of the market, providing a benchmark for investors and a snapshot of market trends.