How Well Do You Know Stock Market Basics?
Unlimited wants, despite limited resources, represents the economic problem of what?
A measure of a stock's risk relative to the market portfolio is known as what Greek letter?
What relationship dictates most of economics?
- Wages and employee morale
- Supply and demand
- Utility and scarcity
- Funds and ETFs
Which of the following carry zero principal risk, due to full faith and credit backing by the government?
- Treasury bonds
- Mutual funds
- Index funds
What portfolio action is always advised to mitigate risk?
- Investing all your life savings in GameStop
- Carry a well-diversified portfolio
- Investing in the stock market based on what friends say
- Buying one "surefire" stock
How many stocks are in the Dow Jones Industrial Average?
What is an investment term for performing research on stocks before investing?
- "Asking Warren Buffett"
- "Going to the moon"
- "Make money"
- "Due diligence"
The highest price the buyer is willing to pay for a stock share or security is called what?
The lowest price a seller is willing to sell a stock share or security is called what?
Times of rising stock prices with optimistic prospects for a prolonged period of time refers to what creature's characterization?
- Bear markets
- Bull markets
- Fish markets
- Phoenix markets
Another word for financial return is what?
Conversely, times of dropping stock prices with concerning prospects for a prolonged period of time refers to what creature's characterization?
- Bear markets
- Bull markets
- Dog markets
- Eagle markets
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Stock Market Basics
The stock market is the collective place/term for buyers and sellers of stock securities. Common stocks provide the owner a proportionate interest in a company's assets, profits, and dividends. Preferred stocks offer the perk of a constant dividend. The stock type gets its attractive name from the increased value preferred stockholders get when bankruptcy happens. Sharing is caring in a company. Owning a stake in a company is called a share. Shares are what ownership is measured in.
Those investing in stocks need to know the relationship between risk and return. All stocks carry the risk to lose money. The lower the number, the lower the risk (above one is considered risky, below one is considered relatively safe). The greater the risk, the greater the expected return. A well-diversified portfolio mitigates risk. Savy players of the stock game attempt to "time the market," meaning they predict future stock market behaviors and attempt to buy before their company's price rises and sell before it falls, whether for company or industrial reasons.
The New York Stock Exchange dominates the lucrative landscape of stock trading. Investors buying and selling trade approximately 1.46 billion daily shares of publicly traded companies. Those investing in stocks do so short-term (less than a year) and long-term. Exchange-traded funds are funds that can also be traded on exchanges like a stock.