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Stock Market / Business Ownership
Stock Market / Business Ownership
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Stock Market basics and types of business ownership
Flashcards
35 cards
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Practice quiz
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Questions
35
Answers
1
When a company decides to go public, they should
Find an investment banker to underwrite the stock offering
Notify the board of directors
Register with the IRS
Print stock shares for investors
2
An advantage of being a sole proprietor is
You get all of the profits for a business
You make all of the decisions for the business
Sole proprietors can set their own schedule
All of the above
3
What is the term for the fee charged when a business takes out a loan from a bank?
Principal
Interest
Time
Rate
4
A tombstone ad is
An announcement that the company is closing
An announcement that the company is going public
An announcement that the owner of the company has died
An announcement that the company will no longer be public
5
What is the opening price?
The price I originally pay for the stock
The first price of the stock on the primary market
The price the stock sold at when the IPO was announced
The price at which the stock first trades for the day
6
An entrepreneur is
someone who takes a risk in starting a business
someone who does all of the accounting for a business
someone who manages a business for their boss
I don't know this answer because I don't pay attention.
7
Which type of stock offers stockholders the right to vote on major company issues.
IPO stock
Preferred Stock
Common Stock
None of the above
8
Proctor and Gamble started out as a
Corporation
Sole Proprietorship
None of the above
Partnership
9
A partnership is
A company in which owners share in expenses and profits
A company in which owners share in business decisions
All of the above
A company owned and managed by 2 or more people
10
The symbol used to find stock prices is called
acronym
anagram
Ticker symbol
Trademark
11
Generally speaking your risk tolerance is highest when
You are young and starting your career
You are unemployed
You are close to retirement
You are employed and established in your career
12
One advantage of a corporation is
A corporation is easier to form than a sole proprietorship.
The owners and managers are taxed on company earnings
The owner gets to make all of the business decisions
The owners and managers are not personally liable for debts
13
Which of the following is an example of a Private Corporation
Hershey Corporation
Proctor and Gamble
Walmart Corporation
Trump Organization
14
This type of stock is associated with a greater risk
Common Stock
None of the above
IPO stock
Preferred Stock
15
Unlimited liability means
Owners share the debt with the bank
Owners are personally responsible for any and all debt
Owners are responsible for debts equal to their investment
Owners are not responsible for debt
16
A Company is
Baking cookies and selling them to friends.
A computer technician helping people fix their computers
A business organized for charitable purposes, not for profit
Business formed to supply goods or services for profit.
17
On which market do you and I purchase stock?
The secondary market
The primary market
18
Which type of business is the easiest to organize?
Partnership
Corporation
Sole Proprietorship
Limited Liability Corporation
19
How can you vote if you are unable to attend the stockholders meeting?
You can send your vote by registered mail
You can email your vote
You must be in attendance to vote
You can vote by proxy
20
Stock sold to the general public is sold on the
Secondary Market
Federal Reserve Bank Listing
None of the above
Primary Market
21
In a corporation
The managers are separate from the owners.
The owners are the managers
The managers pay dividends to the owners
The owners pay dividends to the managers
22
All of these are advantages of privately held companies except
Owners decide how company profit will be used
Owners do not need to disclose company finances
Owners get to make all of the business decisions
Owners manage stockholder decisions
23
Where can I find financial information about a company?
The annual report of the company
All of the above
MSN Money
Yahoo Finance
24
If a corporation in which you are invested goes bankrupt, what are your rights?
As a stockholder, you will lose all of your investment
As stockholder, your investment will be repaid before debts
The government will seize all corporate assets
Stockholders will be paid after company debts are settled
25
Common Stockholders have all of the following rights except"
The right to declare dividends
To receive company financial reports
The right to share in company profits through dividends
To vote at stockholder meetings
26
Which investor buys and sells stock on the primary market?
A Consumers
B Investment bankers
Both b and c
C underwriters
27
How can a company raise capital to expand the business?
Sell Stock
Borrow money from the bank
Work with a venture capitalistA
All of the above
28
In a partnership who is liable for company debts
Both partners are equally liable
Customers
Business debts are paid by employees
One partner makes all decisions and is liable for debts
29
What is the formula for calculating simple interest on a loan?
i=rp
r=it
t=pr
P = rt
30
A sole proprietor is
A person who owns stock in a corporation
A person who starts their own business
A person who works for a corporation
The decision maker in a partnership
31
IPO stands for
Immediate Profit Offering
Internal Product Outlet
Interest Paid Out
Initial Public Offering
32
An entrepreneur might choose to incorporate if
The cost of borrowing money from a bank is too high
He wants to finance company expansion
He wants to finance new product development
all of the above
33
The most important responsibility of a company's stockholder is
To sell stock when the market goes down
To promote stock among friends and family
To invest in competing companies
To be well informed about the company
34
Which type of stock guarantees dividends to shareholders if declared.
Preferred Stock
IPO Stock
Common Stock
None of the above
35
As a stockholder, what action can you take if you disagree with company decisions?
You can introduce a proposal at a stockholders meeting.
You can overrule the decision.
You have no rights
