Stock Market Basics
This is the term for a place where stocks are bought and sold.
What is a stock exchange?
This illegal practice involves trading stocks based on non-public, confidential information.
What is insider trading?
The bursting of this speculative bubble in the early 2000s caused many tech stocks to lose massive value.
What is the Dot-Com Bubble?
Companies like Apple, Microsoft, and NVIDIA belong to this stock market sector.
What is the technology sector?
This ratio, calculated as a company’s stock price divided by its earnings per share, is commonly used to assess valuation.
What is the Price-to-Earnings (P/E) ratio?
A company that regularly pays part of its profits to shareholders is known for issuing this.
What is a dividend?
This infamous Ponzi schemer defrauded investors out of billions before being caught in 2008.
Who is Bernie Madoff?
The stock market crash of this year led to the Great Depression.
What is 1929?
This sector includes companies that manufacture and sell everyday consumer goods such as food, beverages, and household products.
What is the consumer staples sector?
A company’s ability to meet short-term obligations is measured by this ratio, which compares current assets to current liabilities.
What is the current ratio?
The SEC, which regulates the stock market, stands for this.
What is the Securities and Exchange Commission?
This illegal practice involves artificially inflating the price of a stock through misleading promotions before selling off shares at a high price.
What is a pump-and-dump scheme?
This financial crisis, triggered by excessive subprime mortgage lending and securitization, led to the collapse of Lehman Brothers and a global recession.
What is the 2008 Financial Crisis (or Global Financial Crisis)?
This industry within the financial sector focuses on managing money for clients and includes companies like BlackRock and Vanguard.
What is asset management (or investment management)?
This profitability metric, expressed as a percentage, measures how much profit a company generates from its total revenue.
What is the profit margin?
This trading strategy involves purchasing a broad market index regularly, regardless of price fluctuations, to reduce risk over time.
What is dollar-cost averaging?
In 2001, this energy company collapsed after it was revealed that executives had engaged in widespread accounting fraud to hide debt and inflate profits.
What is Enron?
In 1987, the Dow Jones Industrial Average dropped 22.6% in a single day, a day now known as this.
What is Black Monday?
Amgen, Biogen, Regeneron, and CRISPR Therapeutics are companies in this stock market sector.
What is the biotechnology sector?
This ratio helps investors determine how much debt a company has relative to its equity and is important for assessing financial risk.
What is the debt-to-equity ratio?
This rule, established under SEC regulations, prevents company insiders from selling their shares immediately after an IPO.
What is the lock-up period?
This stock market manipulation tactic involves placing fake buy or sell orders to deceive other traders and then quickly canceling them. It was banned by the SEC in 2010.
What is spoofing?
This 17th-century financial bubble, often considered one of the first recorded speculative manias, involved the overinflated prices of flower bulbs.
What is Tulip Mania?
Boston Dynamics, iRobot, Intuitive Surgical, and ABB specialize in automation and artificial intelligence within this rapidly growing industry.
What is the robotics industry?
This financial metric, often reported in a company’s earnings release, represents the portion of a company’s profit allocated to each outstanding share of common stock.
What is Earnings Per Share (EPS)?