THE STOCK EXCHANGE QUIZ

1. Fill in the missing words. Before you start dealing in all kinds of s______________, you must be aware of the risks you take. There are two main types of capital markets: e______________, for the trading of company shares, and b______________, for the trading of the debt of companies and governments.

1. Fill in the missing words. Before you start dealing in all kinds of securities, you must be aware of the risks you take. There are two main types of capital markets: equity, for the trading of company shares, and bond, for the trading of the debt of companies and governments.

2. Fill in the missing words. B______________ are long-term loans that earn a fixed rate of interest. S______________ pay dividends and enable the bearer to own a part of the company. Dividends may or may not be paid depending on the p______________ of the company.

2. Fill in the missing words. Bonds are long-term loans that earn a fixed rate of interest. Shares pay dividends and enable the bearer to own a part of the company. Dividends may or may not be paid depending on the profitability of the company.

3. Fill in the missing words. Companies need money to grow and create new jobs. That is why they go public and issue and sell shares on the p_____________ market for the first time. This is called f______________ or initial public offering (IPO). The market place for trading in securities that are not new issues is called s______________ market.

3. Fill in the missing words. Companies need money to grow and create new jobs. That is why they go public and issue and sell shares on the primary market for the first time. This is called flotation or initial public offering (IPO). The market place for trading in securities that are not new issues is called secondary market.

4. TRUE (T) or FALSE (F)? Equity is the capital that the company has from loans. T/F

4. TRUE (T) or FALSE (F)? Equity is the capital that the company has from loans. FALSE

5. TRUE (T) or FALSE (F)? Both bonds and stocks are securities. T/F

5. TRUE (T) or FALSE (F)? Both bonds and stocks are securities. TRUE

6. YES or NO? Can private limited companies sell their shares on the stock exchange? YES/NO

6. YES or NO? Can private limited companies sell their shares on the stock exchange? NO

7. Which banks might be engaged in the dealings on the stock exchange? _________________________

7. Which banks might be engaged in the dealings on the stock exchange? INVESTMENT OR MERCHANT BANKS

8. YES or NO? Are blue-chip shares likely to be significantly affected by bad economic conditions? YES/NO

8. YES or NO? Are blue-chip shares likely to be significantly affected by bad economic conditions? NO

9. If you want to make securities available for people to buy, do you ISSUE or UNDERWRITE them? ______________________

9. If you want to make securities available for people to buy, do you ISSUE or UNDERWRITE them? ISSUE

10. TRUE (T) or FALSE (F)? IPOs are often issued by smaller, younger companies seeking the capital to expand, but are not done by large privately owned companies looking to become publicly traded. T/F

10. TRUE (T) or FALSE (F)? IPOs are often issued by smaller, younger companies seeking the capital to expand, but are not done by large privately owned companies looking to become publicly traded. FALSE

11. What do brokers or investment firms charge for their brokerage services? A margin B commission C interest

11. What do brokers or investment firms charge for their brokerage services? A margin B commission C interest

12. TRUE (T) or FALSE (F)? Securities Exchange Commission is the British agency responsible for stock market regulation. T/F

12. TRUE (T) or FALSE (F)? Securities Exchange Commission is the British agency responsible for stock market regulation. FALSE

13. A group of companies who agree to set the price of something they produce at a fixed level in order to limit competition and increase their own profits is called: A multinational B monopoly C cartel

13. A group of companies who agree to set the price of something they produce at a fixed level in order to limit competition and increase their own profits is called: A multinational B monopoly C cartel

14. What is the plural of INDEX? __________________

14. What is the plural of INDEX? INDEXES or INDICES

15. What's the name of the missing index? ________________ the Tokyo Stock Exchange ________________ the Paris Stock Exchange ________________ the London Stock Exchange ________________ the Frankfurt Stock Exchange ________________ the New York Stock Exchange ________________ the Zagreb Stock Exchange

15. What's the name of the missing index? Nikkei - the Tokyo Stock Exchange CAC - the Paris Stock Exchange FTSE - the London Stock Exchange DAX - the Frankfurt Stock Exchange Dow Jones (Industrial Average) - the New York Stock Exchange Crobex - the Zagreb Stock Exchange

16. TRUE (T) or FALSE (F)? Wall Street exclusively refers to the physical location of the New York Stock Exchange. T/F

16. TRUE (T) or FALSE (F)? Wall Street exclusively refers to the physical location of the New York Stock Exchange. FALSE

17. YES or NO? Are hedge funds safer than mutual funds? YES/NO

17. YES or NO? Are hedge funds safer than mutual funds? NO

18 What do you call financial organizations such as pension funds and insurance companies which own most of the shares of all leading companies (over 60% and rising)? A institutional investors B brokerage firms C mutual funds

18 What do you call financial organizations such as pension funds and insurance companies which own most of the shares of all leading companies (over 60% and rising)? A institutional investors B brokerage firms C mutual funds

19. They trade with a higher-than- average risk, in return for a higher-than- average profit potential, anticipating future price movements. Who are they? A stockbrokers B market makers C speculators

19. They trade with a higher-than- average risk, in return for a higher- than-average profit potential, anticipating future price movements. Who are they? A stockbrokers B market makers C speculators

20. Which of the following are not speculators in the stock market? A bulls B bears C wolves

20. Which of the following are not speculators in the stock market? A bulls B bears C wolves