Special Sub-Topic: Stock Market Basics Part 1
|Where is the New York Stock Exchange located?|
Wall Street. Wall Street is located in Lower Manhattan, New York City. The stock exchange formally opened in 1792 following the Buttonwood Agreement. Prior to this date traders and speculators would meet under a buttonwood tree which grew at the bottom of Wall Street.
|Which of the following cities does NOT have a formal stock exchange?|
Monte Carlo. Monte Carlo has a casino, which some would say is pretty much the same as a stock market when it comes to losing money.
|Which of the following might you see roaming a stock market?|
Bulls. "Bulls" is a term given to investors who believe the market will rise and invest accordingly. "Bears" believe the opposite and hence take a different investment strategy. You may also come across "Stags" who actually borrow money they don't have to invest in particular stocks.
|Which of the following are you unlikely to find traded officially on world stock markets?|
Insults. Almost any trade-able commodity can be bought or sold. Oil and food products such as wheat and sugar are also traded. Insults abound between traders but are not considered a trade-able item.
|Holding a corporate bond is the same as holding corporate stock.|
f. This is most definitely untrue. As a stockholder you actually own part of the company and are entitled to a share of any profits. As a bondholder you are lending money to the company in return for a rate of interest and have no entitlement to a share of profits.
|Which of the following might be a reason for a stock market to lose value suddenly?|
All of these (A big company going bankrupt, A terrorist attack, Fear of a global recession). Stock markets are extremely sensitive to good and especially bad news. Any of the events mentioned would probably be sufficient to send tremors through world stock markets.
|Which term most accurately describes selling shares at a higher price than the price at which they were bought?|
Profit. The reason people play the market is to make money and hopefully sell things at a greater price than they originally paid. This is called profit. A loss is exactly the opposite. An asset is the investment you actually hold.
|Who portrayed Gordon Gekko in the 1987 film "Wall Street"?|
Michael Douglas. This film nicely portrays the skulduggery that goes on in financial worlds. Michael Douglas is the ruthless speculator who coined the phrase "Lunch is for wimps". Nick Leeson was the real life trader who caused Baring's Bank to collapse following some disastrous speculation on the Japanese Stock Exchange.
|The FTSE 100 index is used to measure stock market performance in which country?|
United Kingdom. FTSE is an acronym for Financial Times/Stock Exchange; the two bodies responsible for the production of the index. As well as the FTSE 100 several other indices are produced by FTSE covering all aspects of the UK stock market.
|Which term is used to describe a payout made to shareholders representing their share of a corporation's profit?|
Dividend. Dividends are normally paid twice a year; an interim dividend is paid based on expected annual profit and a final dividend representing the actual results. In a corporation's financial year where finances have not been good the dividend may be suspended. Coupon is the term used to describe the rate of interest payable on a corporate bond and does not reflect the profitability of a company.
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