WHAT DO YOU KNOW ABOUT STOCK MARKETS?

When people are financially literate, they have the knowledge and information necessary to make sound financial decisions. The 2020 TIAA Institute-Global Financial Literacy Excellence Center Personal Finance Index reported that more than half of U.S. adults understood borrowing, saving, earning and consuming, while less than half had a clear understanding of investing and risk.

One common type of investment is stock. The stock market is where stock is issued, purchased and sold. Stockholders have an ownership interest in a company. Test your knowledge of stocks by taking this brief quiz.

1. What is a characteristic of a bull market?
   1. Stock prices rise
   2. Stock prices fall
   3. Investors are pessimistic
   4. None of the above
      
2. A stockholder is ______ who/that owns at least one share of a corporation’s stock.
   1. A person
   2. A company
   3. An institution
   4. All of the above
3.  A person may be able to invest in a company by purchasing:
   1. Common stock\
   2. Preferred stock
   3. Corporate bonds
   4. All of the above
4. What term is used to describe a stock market decline of 10 percent?
   1. A dip
   2. A correction
   3. A haircut
   4. A bath
5. List the following from highest risk to lowest risk:
   1. Emerging market stock
   2. 10-year Treasury bond
   3. 30-year investment-grade bond
   4. Savings account
   5. S. blue chip stock
6. Which of the following is a reason that a company might issue stock?
   1. Raise capital
   2. Transfer ownership
   3. Reduce debt
   4. All of the above

If you have any questions about the answers, let us know.

Photo by: Stock Market © Tnsdesign | Dreamstime.com

Answers: (1) A; (2) D; (3) D; (4) B; (5) A, E, C, B, D; (6) D