Economics Review Sheet – The Stock Market

 

Vocabulary:

 

Questions:

1.          When does the New York Stock Exchange open and close each day?

2.          How does a stock trade work?  Know the steps to sell and buy a stock.

3.          What is the role of the specialist?  What does he/she do to keep trading smooth?

4.          What did the Buttonwood Agreement say?

5.          Selling Short

    1. How did Jay Gould “sell short?” 
    2. How can you sell short today? 
    3. What did Gould do that you can’t do?

6.          Why did the stock market crash of 1929 happen?  (What circumstances/events led to the crash?)

7.          What is the Securities and Exchange Commission?  What rules does it enforce?

8.          What is the purpose of stock diversification?

9.          What is the Dow Jones Industrial Average?

    1. What types of stocks are in the DJIA (you don’t have to know all 30, just know why they are chosen)?
    2. How does the DJIA help investors follow the market?

10.        What is a stock split? 

a.       How does a stock split work?

b.      Why would a company split its stock?

c.       What usually happens to the price of the stock after the split?

11.        What is buying on margin?  How does it work?

 

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