Stock Jobs Basics 3

Question 1

What does the price-to-earnings (P/E) ratio measure?

Accepted Answer

Share price relative to earnings per share

Answer

The P/E ratio compares a stock's price to its earnings per share.

Question 2

Preferred stock differs from common stock mainly because it usually offers what?

Accepted Answer

Priority on dividends and fixed payouts

Answer

Preferred stock typically pays fixed dividends and ranks ahead of common stock for payouts.

Question 3

What is a 'bear market'?

Accepted Answer

A prolonged period of falling prices

Answer

A bear market is a sustained decline in prices, typically 20% or more.

Question 4

A stock split does what to the number of shares and price?

Accepted Answer

Increases shares and lowers price per share

Answer

A split increases share count and proportionally lowers the per-share price, leaving total value unchanged.

Question 5

What is the 'ask' price?

Accepted Answer

The lowest price a seller will accept

Answer

The ask is the lowest price a seller is currently willing to accept.

Stock Jobs Practice Test