Business and Personal Finance © 2007

Chapter 9: Stocks

Practice Tests

1
A company that issues stock to a small group of people is a _______.
A)public corporation
B)private corporation
C)sole proprietorship
D)partnership
2
A company that sells its shares openly in stock markets, where anyone can buy them, is a _______.
A)sole proprietorship
B)public corporation
C)securities exchange
D)private corporation
3
One advantage of preferred stock is _______.
A)less risk than common stock
B)guaranteed income
C)higher yield than corporate bonds
D)greater potential for growth than common stock
4
A _______ is a stock that pays higher-than-average dividends compared to other stock issues.
A)defensive stock
B)penny stock
C)income stock
D)cyclical stock
5
A(n) _______ is a stock that has steady earnings and continues paying dividends even during economic declines.
A)penny stock
B)defensive stock
C)cyclical stock
D)growth stock
6
The total amount of stocks and bonds issued by a corporation is called _______.
A)total return
B)large-cap stock
C)small-cap stock
D)capitalization
7
The market condition that occurs when investors are pessimistic about the economy and sell stock is called a _______.
A)bull market
B)bear market
C)total return
D)security
8
The market condition that occurs when investors are optimistic about the economy and buy stocks is called a(n) _______.
A)bear market
B)bull market
C)economic decline
D)efficient market
9
A request that a stockbroker sell a stock for a specific amount is called a _______.
A)stop order
B)market order
C)portfolio
D)selling short
10
Most over-the-counter stock is traded through _______.
A)the NYSE
B)AMEX
C)NASDAQ
D)the Tokyo Exchange
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