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Stock Market Basics

Answer the following questions about stock market transaction basics.

  1. A stock with a high beta value means that its stock price varies greatly from day to day.
    1. True
    2. False

    Answer: True! A stock with a high beta value means that its stock price varies greatly from day to day.


  2. The best time to buy stocks is when its price is close to its 52 week high.
    1. True
    2. False

    Answer: False! The best time to buy is when the price is low.


  3. All stocks are required to pay a dividend two times during the year.
    1. True
    2. False

    Answer: False!


  4. Data on financial websites is updated at 12:00 Midnight (Eastern Standard Time) every night.
    1. True
    2. False

    Answer: False!


  5. Which of the following is not one of the main stock indices tracked by Yahoo! Finance and other financial websites?
    1. Dow Jones
    2. Nasdaq
    3. New York Stock Exchange
    4. S&P

    Answer: The New York Stock Exchange is not tracked. Financial websites track the Dow Jones, Nasdaq, and S&P 500 but do not track the New York Stock Exchange.


  6. Oil is an example of a commodity.
    1. True
    2. False

    Answer: True! Oil is a commodity.


  7. The longer the term on a US Treasury Bond, the higher the interest rate.
    1. True
    2. False

    Answer: True! The longer the term on a US Treasury Bond, the higher the interest rate.