Stock Market Overview Quiz
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Questions and Answers

What is the primary function of a stock exchange?

  • To facilitate the trading of stocks and shares. (correct)
  • To provide insurance for stock investments.
  • To issue new shares to the public.
  • To regulate the supply of shares in the market.

    • What does P/E Ratio stand for in the context of stock investing?

  • Portfolio Evaluation Rate
  • Public Equity Rate
  • Price to Equity Return
  • Price to Earnings Ratio (correct)

    • Which of the following describes a limit order?

  • An order that can only be placed during market hours.
  • An order that executes immediately at the best available price.
  • An order to buy or sell a stock at a specific price or better. (correct)
  • An order that automatically sells a stock once it reaches a certain price.

    • Which factor does NOT typically influence stock prices?

    <p>Local weather conditions</p> Signup and view all the answers

    What is meant by diversification in investing?

    <p>Spreading investments across various assets to reduce risk.</p> Signup and view all the answers

    Study Notes

    Stock Market Overview

    • Definition: A marketplace where stocks are bought and sold.
    • Key Terms:
      • Stock Exchange: Platforms where stocks are listed and traded (e.g., NYSE, NASDAQ).
      • Securities: Stocks and other financial instruments.
    • Stocks and Shares:
      • Stock: Represents ownership in a corporation.
      • Share: A single unit of stock.
      • Equity: Ownership stake in a company.
      • Shareholder: An owner of company stock.

    Stock Exchanges

    • Major Exchanges: NYSE, NASDAQ.
    • Definition: Platforms where stocks are listed and traded.

    Initial Public Offering (IPO)

    • Definition: The first sale of a company's stock to the public.
    • Process:
      • Underwriting
      • Pricing
      • Going Public

    Brokers and Trading Platforms

    • Broker: Facilitates stock buying/selling for a fee.
    • Online Trading Platforms: Digital interfaces for trading.
    • Key Terms:
      • Commission: Fees for trading.
      • Brokerage Account: Account used for trading.

    Stock Pricing and Supply/Demand

    • Concept: Stock prices are dependent on supply and demand.
    • Key Factors:
      • Company Performance
      • Market Sentiment
    • Company Performance is often evaluated using indices

    Market Indices

    • Definition: Measures of a group of stocks' performance.
    • Major Indices: Examples are Dow Jones, S&P 500, and NASDAQ.

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    Related Documents

    Stock Market and Macroeconomics PDF

    Description

    Test your knowledge on the stock market, including key terms and concepts such as stock exchanges, IPOs, and trading platforms. Dive into the fundamentals of stocks, shares, and the role of brokers in the market.

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