Stock Jobs Basics 2

Question 1

What does owning a share of common stock primarily represent?

Accepted Answer

A fractional ownership stake in the company

Answer

Common stock represents a fractional ownership interest (equity) in the issuing company.

Question 2

What is a stock's 'market capitalization'?

Accepted Answer

Share price multiplied by total outstanding shares

Answer

Market cap equals the current share price times the number of outstanding shares.

Question 3

Which order type executes immediately at the best available current price?

Accepted Answer

Market order

Answer

A market order fills right away at the best available price.

Question 4

What is a dividend?

Accepted Answer

A portion of company profits paid to shareholders

Answer

A dividend is a distribution of company profits to shareholders.

Question 5

The 'bid' price in a stock quote represents what?

Accepted Answer

The highest price a buyer will pay

Answer

The bid is the highest price buyers are currently willing to pay.

Stock Jobs Practice Test