The Third Quiz Review. What does “caveat emptor” mean?

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Presentation transcript:

The Third Quiz Review

What does “caveat emptor” mean?

Let the buyer beware – it means the burden of gaining or learning all the information about a stock falls on the person buying it.

Bulls, bears, what does it mean?

Bulls believe the stock market will go up, and buy long (keeping the stocks for a long time, so they will go up). Bears believe the opposite.

What’s an investment bank?

This is an entity that buys an entire issue of some corporation’s stock and then sells that stock to the public.

What’s an underwriter?

An entity that specializes in selling stocks or bonds to the public.

What goes on an balance sheet?

Assets – things a businesses owns of value Liabilities – debts a business owes to other people or businesses Net Worth – the difference between assets and liabilities

What is insider trading?

When someone buys or sells stock based on information that no one else has. Having the information isn’t a crime, but acting on it is. This is what Martha Stewart went to jail for.

Why do we have security markets?

They are a great place to buy or sell stocks, they’re also an important place to determine the price of stocks (using supply and demand, of course)

What are dividends?

When you own a share of a company, and you get a share of the profits, those are dividends.

Why would you go to a brokerage firm when you could use a web site to buy stocks?

For expert advice…brokerage firms spend a lot of time and money researching stocks and bonds.

What is capital growth (when we’re talking about stocks, that is)?

If you buy stocks for 10 dollars a share and you sell it later for 15 dollars a share, then the 5 dollars a share you make on the investment, is called capital growth.

The End