1. "Lots of Americans have investments in the stock market, but do they really know what the experts know? Hopefully this quiz will give you some information."

1. Which agency in Washington, D.C. regulates the securities industry?

The U.S. Mint

The Federal Regulation Authority

The Securities and Exchange Commission

The Stock Market

The SEC requires all public companies to disclose their financial information to the public. This protects investors from any fraudulent acts and makes the information readily available to the public.

2. What is it called when a person trades a security while in possession of non-public information?

Informed trading

Insider trading

Solicitation trading

Smart trading

3. The Securities Act of 1933 was a direct result of which of the following?

WWI

inflation

President Roosevelt's death

The Great Depression

Before the Great Depression of 1929, there was little regulation in the stock market. People were unable to access information about stocks and many invested their money based on emotions rather than performance. The Securities Act of 1933 was instituted to protect the public against misrepresentation, fraud and deceit, and to provide information to the public regarding performance history.

4. What is the system of electronic filing with the SEC called?

HARVEY

EDGAR

HERMAN

PETER

All public documents must be filed with the SEC using the Electronic Data Gathering Analysis and Retrieval system (EDGAR). Anyone can now access the SEC website at www.SEC.gov and retrieve all filings submitted by any public company.

5. What is a professionally managed collection of stocks, bonds and other financial instruments that pools money from many investors?

A stock portfolio

A mutual fund

A closed-end fund

A trust fund

Mutual funds are the safest way for the average investor to invest in the stock market. Because professional portfolio managers are hired to manage and re-balance the fund's investments, it limits the investor's exposure to a market meltdown.

6. What was the Sarbanes-Oxley Act named after?

The intersection of Sarbanes Street and Oxley Avenue in Washington, D.C.

The Chairman of the Board of Enron Corp.

The hotel where it was written

Two U.S. Congressmen

Named after Senator Paul Sarbanes and Representative Michael Oxley, the act was legislated in 2002. It was instituted to protect the investor by assuring that all EDGAR filings with the SEC have been reviewed and approved by all signing officers and that the documents do not contain any untrue or misleading information.

7. What is an ETF?

An Essential Trading Facility

An Elaborate Trust fund

An Excellent Timed Fund

An Exchange Traded Fund

According to Forbes' Investopedia, "an ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold". They usually have lower management costs than other mutual funds.

8. What is an Index Fund?

A mutual fund with a portfolio that matches a particular market index

A mutual fund that has only inexperienced portfolio managers

A mutual fund that invests mainly in reference book publishers

A mutual fund that invests only in political stocks

An index Fund is a type of mutual fund with a portfolio that strives to match a particular market index such as the S&P 500 Index. It provides broad market exposure with low operating expenses.

9. What do you call a person who rapidly buys and sells stocks throughout the day?

A margin trader

An informed investor

A day trader

A portfolio manager

10. The oldest U.S. stock market index tracks the performance of 30 of the largest and most widely owned stocks. What is it called?

The New York Stock Exchange

The Wall Street Journal

The NASDAQ Index

Dow Jones Industrial Average

First created in 1896, the DJIA, or the Dow, tracked the performance of the 12 largest publicly held companies in the United States. As the country became more technology oriented, the index changed drastically. General Electric is the only company remaining of the original twelve. The Dow now tracks 30 stocks.

2. "How much do you know about these prominent companies and their stock symbols?"

1. This company makes a wide variety of products, but tapes, adhesives, and cleaning pads are some of its best known items. In addition, its New York Stock symbol describes the name of the company. What is it?

STAP

MMM

FILM

HD

3M Company, with the symbol MMM, makes the famous Scotch brand tapes and adhesives, as well as the convenient Post-it notes. 3M also manufactures Thinsulate fabric, which is used in gloves, hats and other pieces of thermal clothing. The company headquarters are in St. Paul, Minnesota.

2. Although it first named its web site "Jerry and David's Guide to the World Wide Web", this Internet powerhouse now has a shorter name. In early 2008, Microsoft offered to pay over $40 billion dollars for it. What is its stock symbol?

CNN

YHOO

AOL

GOOG

Yahoo, incorporated in 1995, has "the world's most visited web site", according to- you guessed it- its web site. The company offers email services, entertainment, news, maps and other services on its site. The stock is listed on the NASDAQ stock exchange.

3. Starting in Texas, this company provided power for millions of people as it expanded into Europe. It owned electrical power plants and oil and gas reserves. In 2007, however, an investment partnership bought it, making it a private company. What was this company's symbol on the New York Stock Exchange?

GOC

DGO

AND

TXU

Texas Utilities, an international conglomerate which bought Enserch Energy in 1997, was itself bought by a partnership headed by Kohlberg, Kravis and Roberts. The company is still operating, but it is no longer a public company and hence no longer listed on the New York Stock Exchange,

4. The stock symbol for the worldwide, online auction company eBay is simply EBAY.

True

False

Yes, Ebay is one of the few companies whose name is its stock symbol. It is listed on the NASDAQ exchange, which generally uses symbols made of four letters. Ebay owns Paypal, which is an online money exchange service that people use to buy or sell items on Ebay or to pay for other online items, like tickets.

5. A legacy of inventor Alexander Graham Bell, this communications company was forced to divest itself of many of its local companies. In addition, it spun off Lucent in 1996 and NCR in 1997. What is this company's stock symbol?

SBC

NRX

T

AVY

AT&T Corporation, whose New York Stock Symbol is just T, was acquired by SBC in 2005, but later that year changed its name back to AT&T Corp. In 1927, AT&T charged $75 for the first three minutes of a trans-Atlantic call, which was a lot of money back then (source: AT&T's web site). Another milestone occurred in 1968, when AT&T began the 911 emergency phone service.

6. Headquartered in Everett, Washington, this airplane-manufacturing company rolled out the "Dreamliner" passenger jet in 2007. This plane offers better fuel economy, larger windows and better communications systems, according to its manufacturer. What is the stock symbol for this company?

CES

DBD

AIR

BA

Boeing, listed on the New York Stock exchange as BA, introduced its Boeing 787 on July 7, 2007 (the date is significant, because it is written 7/08/07). Boeing also made the 727, 737, 747 and other planes which are flown by many of the world's commercial airlines. In fact, as of 2007, all of Southwest Airline's planes were Boeing 737s.

7. This is another company headquartered in the beautiful state of Washington, and it sells coffee all over the world, with stores in the United States, Brazil, Germany, France, Greece and other countries. They also sell pastries, music CDs and provide wireless Internet in their stores. What is this company's stock symbol?

CC

STAR

SBUX

KONA

Starbucks Corporation has the clever symbol SBUX, and is listed on the NASDAQ exchange. On their web site, the company claims to encourage good relations with their coffee growers, employees, and to "minimize our environmental footprint".

8. How many companies make over $40 billion in one year? This huge company drills for oil reserves, refines petroleum products, and owns service stations, and it made that profit milestone in 2007. What is the stock symbol for it?

KEI

XOM

CON

CBI

ExxonMobil made approximately $4.6 million an hour in 2007, when it scored its record profit, according to the Washington Post newspaper. The company's name dates from 1999, when Exxon merged with Mobil Oil in an $80 billion deal. ExxonMobil also spends money on charitable causes: it has donated more than $40 million since 2000 in the Africa Health Initiative, which seeks to reduce the incidence of malaria in Africa, according to company publications.

9. The stock symbol for this company is HD, and their motto is "You can do it. We can help." What is the name of the company?

Highland Deposits

Household Design

Home Depot

Health Designs, Inc.

Home Depot, with its distinctive orange decor, is a chain of hardware stores of the "big box" variety. They sell kitchen appliances, flooring, lumber, plumbing supplies, and other items. The motto is from their web site and from television advertisements.

10. A huge company that owns Fruit of the Loom, Geico Insurance and Boat US, Berkshire Hathaway has the highest stock price on the New York Stock Exchange. In fact, on Feb. 8, 2008, its "A" shares closed at $138,400 each! What is the symbol for this stock?

BRKA

BAC

FL

GEI

The Berkshire Hathaway Company actually has two classes of stock, the hugely expensive "A" shares, and the less expensive "B" shares. The "B" shares, however, have only 1/30 of the rights as the "A" shares, according to Warren Buffet, Berkshire Hathaway's famous chairman. Wouldn't it have been fun to buy this stock when it was much lower?

Other Stock symbols

STAP—An advertising and integrated marketing/communications agency

Cable News Network (CNN) --news cable television network founded in 1980 by Ted Turner

AOL LLC. (formerly America Online, Inc.) --an American global Internet services and media company

DGO—Dragon Oil Share Price

AND Automotive Navigation Data is leading provider of digital mapping data used for location-based services

NRX—is the market leader in asset master data management

SBC- Seychelles Broadcasting Corporation

AVY- Avery Dennison is a global leader in pressure-sensitive technology, self-adhesive base materials and self-adhesive consumer and office products.

DBD Kitchen products

CES—The International Consumer Electronics Show (CES) is a trade show held each January in Las Vegas, Nevada, and is sponsored by the Consumer Electronics Association( trade organization for the consumer electronics industry)

KONA- bike company and bike accessories

STAR—Starent Networks, Corp. is a leading provider of networking solutions required by mobile operators to provide multimedia services to their customers, such as video downloads

CC-Circuit City—is an American dealer and retailer in brand-name consumer electronics, personal computers, and entertainment software

KEI-KEITHLEY INSTRUMENTS- major product lines include Test & Measurement products such as electrometers, voltmeters, signal generators, data acquisition, and production and benchtop parameteric testers and analyzers.

CBI--Chicago Bridge & Iron Company N.V.) combines proven process technology with global capabilities in engineering, procurement(nabywanie) and construction to deliver comprehensive solutions to customers in the energy and natural resource industries.

CON- CON Edison company of NEW York --Provides electric service in New York City (except for a small area of Queens), and most of Westchester County. Also provides natural gas service.

Health Designs is a national leader of providing comprehensive worksite wellness programs and screenings including health risk assessments, health fairs

BAC- Bank of America Corporation

FL- Foot Locker Inc. Retail chain of footwear, apparel(odziez /osprzęt) and accessories.

GEI Inc. is dedicated to the design and manufacturing of LCD, LED(wyświetlacz diodowy), RELAYS(przekaźnik), and TRANSFORMERS

Add words' explanation

Adhesive- klej(adhesive tape-tasma klejaca)

Divest -wyzbyc się

Spin off -wydzielac fragment firmy

Roll out- wypromowac wprowadzic na rynek

Pastry ciastko

drill for oil - prowadzic wiercenia

3. "Do you need a broker to manage your money? Nope. Do they know something you don't? Nope. Here's a quiz that'll start you on your way to managing your own money."

1. How many stocks make up the Dow Jones Industrial Average?

100

2012

26

30

The DJIA is a general barometer of market movement up or down. However, because it only includes 30 blue chip stocks, a broader sampling can be found in the Standard and Poor's 500 Index (S&P 500) or the Russell 2000 which includes smaller companies. The main value of these indices is in identifying trends.

2. There are many types of mutual funds with a range of investment goals - to generate income, preserve your nest egg or take a flyer. Which of the following funds is the most conservative mutual fund investment?

Small cap fund

Gold fund

Sector fund

Balanced fund

A balanced mutual fund holds both stocks AND bonds for balance. These funds are considered safe for the long term. A small cap fund looks for small companies with good ideas and sound business plans but investing in small companies can be risky. A sector fund invests in a single sector of the economy - technology, natural resources,
telecommunications, etc. If that sector falls out of favor, your nest egg's going to take a hit. Finally, a gold fund usually invests in gold mining companies, gold bullion, coins and so on. The price of gold fluctuates, sometimes quickly, and so gold funds are considered risky. Stick with a balanced fund for long-term security.

3. Since 1929, what has been the average percentage return of the stock market?

About 5%

About 7%

About 3.5%

About 10%

The market averages about 10% a year which means one year it's up 20%, the next year it could be down 5%, up 15%, etc. The key to successful investing is to buy good and hold on for the long term and that 10% figure (a good return) will work in your favor.

4. You're 32 years old, just starting to invest and you have $1000 burning a hole in your pocket. For the long term, where should you put that money?

A growth-oriented mutual fund

A real estate investment trust (REIT)

A CD (certificate of deposit)

100 shares of a $10 tech stock

Mutual funds provide instant diversification because they hold many different stocks. A CD is the safest investment but it pays the lowest return. REITs invest in real estate holdings like office buildings and shopping malls so their share prices are tied to the state of real estate and there are often restrictions on when you can remove money from the fund. Finally, buying individual stocks puts "all your eggs in one basket". Mutual funds are the way to go for the long-term investor.

5. What is the advantage of a load mutual fund versus a no-load mutual fund?

Lower taxes on your earnings

Higher returns

There is no advantage

More detailed research

A load is an up-front fee you pay to the mutual fund. Invest $1000 in a fund with a 4.5% front-end load and you're out $45 before you even start. Numerous studies have shown that funds that DON'T charge a load (no-load funds) perform just as well as load funds so always go with a no-load fund. Also, read the fine print. Many funds impose back-end loads - fees you pay when you remove money.

6. Your brother-in-law gives you a hot tip on a sure-thing stock that's about to break out and go through the roof. What should you do with this information?

Watch the stock for at least 1 month

Buy a small number of shares

Ignore it

Research the company

With all due respect, your brother-in-law wouldn't know a hot stock from a hot tamale. Watch any financial show. For any talking head who says a stock is going up there's another pundit saying it's going to tank. Even the so-called experts don't know. When you buy a stock you're buying it from someone who thinks it's topped out. That's what makes a stock "market".

7. Of course there are expenses associated with mutual fund ownership. Nothing's free. Which of the following types of funds will have the lowest annual expenses?

Sector fund

Index fund

Balanced fund

Value fund

Index funds hold the same stocks as the indices they track. An S&P 500 fund will hold the 500 stocks that make up the Standard & Poor's 500 Index. Because there's no buying and selling going on by the fund's management, expenses are very low. Watch out for funds that buy and sell (turn over) lots of stocks each year. These funds pay brokerage fees, research fees, management fees and more - all of which comes right off the top of your earnings.

8. When choosing where to invest your hard-earned money, which of the following should you consider?

All of these

Time horizon

Risk tolerance

Tax consequences

When investing, remember "risk versus reward" - the higher the risk the higher the *potential* reward. CDs, a low risk investment, pay a low rate of return. Junk bonds, a potentially high-risk investment, pay a higher return. Determine your risk tolerance - how much risk are you willing to take?
Your time horizon is how long before you'll need that money. Planning to buy a house in a couple of years? That's a short time horizon so your down payment should be conservatively invested. On the other hand, if you're investing for retirement 25 years hence, you can afford to take a bit more risk because you have time to recover from any losses.
Finally, consider the tax consequences to any investment. An IRA (Individual Retirement Account) allows your investment to grow tax free until you're over 70 years old. A great tax and investment advantage. Remember, most investment activities are "taxable events."

9. According to most experts how often should you check your investment holdings?

Daily

Quarterly

Weekly

Annually

There are intra-day trends, short-term trends (3-9 months), long-term trends (9-24 months). Checking investments daily or weekly will drive the small investor nuts trying to keep track of the ups and downs. Most experts agree that a quick review of your quarterly statements from mutual fund groups, discount brokerages and banks will be sufficient for the long haul.

10. Which of the following is NOT a suitable investment for an investor with a 15-year time horizon and a moderate aversion to risk?

Value-oriented mutual fund

Initial public offering (IPO)

Growth-oriented mutual fund

Index fund

IPOs are issues of stock for companies just going public, that is companies new to the stock market. It's possible to make a killing on an IPO, but more often than not, the small investor gets burnt.
A value-oriented mutual fund buys fundamentally sound stocks currently out of market favor and holds them until they "turn around". Growth-oriented funds buy smaller companies with growth potential. And an index fund is an unmanaged collection of stocks designed to mirror the performance of one of the popular indices. BTW, only 1 in 4 managed mutual funds consistently beat the returns of unmanaged index funds. So much for the experts.

4. "A few questions about derivatives"

1. Which of the following is private contract?

Futures

Forwards

Options

Options on Futures

2. Which is a type of broker?

trader

speculator

hedger

account executive

3. The most important benefit to society of the futures market

price discovery

Speculation

Hedging

Arbitrage

4. Type of option that is easier to analyze or trade

American

European

Candian

Euro

5. Treasury options are traded on which exchange

New York

Phildelphia

Chicago

American

6. Which option type has the largest open volume?

Options on Futures

Index

Stock

Foreign currency

7. If trading gets crazy the last few minutes of trading, the closing price will be set by the

direct clearing group

executive council

settlement committee

clearing center

8. Option that can be exercised before or at the time of expiration

European

American

Canadian

Euro

9. The basis will usually be wider for

uncorrelated with distance

less distant contracts

more distant contracts

the same for all contracts

10. Under the theory of normal backwardation, futures prices will tend to rise over the life of a contract because ____________ tend to be

hedgers, long the futures market

hedgers, short the futures market

speculators, short the futures market

speculators, long the futures market

futures - kontrakty terminowe typu futures

forwards - kontrakty terminowe typu forwards

options on futures - opcje na kontrakty typu futures

hedge 2. Fin zabezpieczenie

speculator spekulant

trader Fin (at Stock Exchange) spekulant giełdowy

A stock broker or stockbroker is a qualified and regulated professional who buys and sells (trades) shares (in other words, stocks) and other securities through market makers on behalf of investors.

account executive referent prowadzący rachunki klienta (banku); Advertg pracownik m odpowiedzialny za klienta

A hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.

Opcja amerykańska - może zostać zrealizowana w dowolnym czasie przed upływem określonego terminu zwanego terminem wygaśnięcia. Opcja europejska - może zostać zrealizowana tylko w jednym, z góry określonym terminie.

• A European option may be exercised only at the expiry date of the option, i.e. at a single pre-defined point in time.

• An American option on the other hand may be exercised at any time before the expiry date.

executive council n (of company) rada wykonawcza; (of party) komitet wykonawczy, egzekutywa; (of labour union) rada wykonawcza

backwardation /'bækw
'deı∫n/ n Fin depor

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