Money Magnets

In the coming weeks, watch out for the Stock Basics Tutorial on this site.

Questions:

1. As a shareholder of a company, you are entitled to all of the following except?
    a> Voting rights
    b> Claim on the company's assets and earnings
    c> Right to information and inspection
    d> Make day to day business decisions
    e> All of the above.

2. Which type of stock pays a fixed dividend to the shareholder but tends to have no voting rights?

    a> Common Stocks
    b> Preferred Stocks
    c> Class A Stocks
    d> None of the Above

3. The following are ways to earn a profit in the stock market except?
    a> Capital Gains (Increase in the market price of the stock from the buying price)
    b> Cash Dividends
    c> Stock Dividends
    d> Stock Rights
    e> All of the above

4. What happens to shareholders if the company goes bankrupt and liquidates?
     a> Shareholders receive a portion of the liquidated assets.
     b> Shareholders contribute in paying the creditors of the company with personal assets.
     c>  Shareholders lose their entire investments in the company.
     d> None of the above.
     e> All of the above.

5. What is the most important factor that affects the value of a company?
     a> Recognition
     b> Cash Flow
     c> Earnings
     d> Market Capitalization
   
6. When the market is referred to as bullish, where do analysts think the market is heading?
     a> Higher
     b> No movement (Stagnant)
     c> Lower
     e> None of the above.

7. A company's market capitalization is calculated using which formula?
     a> The number of shares outstanding divided by the stock price.
     b> The stock price divided by the earnings per share.
     c> Stock price multiplied by the number of shares outstanding.
     d> There is no formula.

8. All of these are stock markets except?
     a> Nasdaq
     b> Nikkei
     c> PSE
     d> NYSE
     e> None of the above

9. Which of the following does not appear in a stock market quote in the newspaper?
     a> Day High and Low
     b> 52 Week High and Low
     c> Ticker Symbol
     d> Number of shares outstanding
     e> Close

10.  Historically, what type of investment has always performed the best over the long term?
     a> Time Deposits
     b> Bonds
     c> Stocks
     d> Mutual Funds
     e> Unit Investment Trust Funds


Answers:
1. d> Make day to day business decisions
2. b> Preferred Stocks
3. e> All of the above
4. c> Shareholders lose their entire investments in the company.
5. c> Earnings
6. a> Higher
7. c> Stock price multiplied by the number of shares outstanding.
8. e> None of the above
9. d> Number of shares outstanding
10.  c> Stocks


Yes!  Over the long term, stocks have historically outperformed all other types of investments with an average return of around 10-12%.  This is why learning how to invest in the stock market is worth your time!  If you scored less than 8 points in the quiz, watch out for the upcoming tutorials on the basics of investing in the stock market only here on Personal Finance - Advices, Tips, and News!

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