Do You Know The Stock Market Game Rules?

1. Each team begins with $_______________ to invest.

Each team begins with a starting capital of $100,000. This amount is represented in different formats such as $100,000.00, 100,000, and 100000. All these formats indicate the same value of $100,000.

Explanation

Each team begins with a starting capital of $100,000. This amount is represented in different formats such as $100,000.00, 100,000, and 100000. All these formats indicate the same value of $100,000.

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2. The Stock Market Game pays dividends.

True

False

The statement "The Stock Market Game pays dividends" is true. Dividends are payments made by a company to its shareholders as a distribution of profits. In the context of the Stock Market Game, it means that participants in the game receive dividends as a way to simulate real-world stock market activities. This allows players to understand the concept of dividends and their impact on investment returns.

Explanation

The statement "The Stock Market Game pays dividends" is true. Dividends are payments made by a company to its shareholders as a distribution of profits. In the context of the Stock Market Game, it means that participants in the game receive dividends as a way to simulate real-world stock market activities. This allows players to understand the concept of dividends and their impact on investment returns.

3. Transactions entered with a limit price will not be held past the initial posting. This applies to both the End of Day or Real Time Games.

True

False

Transactions entered with a limit price will not be held past the initial posting. This means that once a transaction is entered with a limit price, it will either be executed immediately at that price or not at all. It will not be held or delayed for any reason, regardless of whether it is the End of Day or Real Time Games. Therefore, the statement is true.

Explanation

Transactions entered with a limit price will not be held past the initial posting. This means that once a transaction is entered with a limit price, it will either be executed immediately at that price or not at all. It will not be held or delayed for any reason, regardless of whether it is the End of Day or Real Time Games. Therefore, the statement is true.

4. A team will not be listed in regional rankings until their first transaction is entered successfully.

True

False

This statement implies that a team needs to have their first transaction entered successfully in order to be included in the regional rankings. This suggests that the regional rankings are based on the team's transaction history, and teams will not be listed until they have at least one successful transaction. Therefore, the answer is true.

Explanation

This statement implies that a team needs to have their first transaction entered successfully in order to be included in the regional rankings. This suggests that the regional rankings are based on the team's transaction history, and teams will not be listed until they have at least one successful transaction. Therefore, the answer is true.

5. All buy orders must be a minimum of 50 shares.

True

False

The statement is false because it states that all buy orders must be a minimum of 50 shares, which is not true. Buy orders can be for any number of shares, including less than 50.

Explanation

The statement is false because it states that all buy orders must be a minimum of 50 shares, which is not true. Buy orders can be for any number of shares, including less than 50.

6. Trades entered on a Friday at 6:30pm will receive the closing price for Monday (for End of Day Game).

True

False

Trades entered on a Friday at 6:30pm will receive the closing price for Monday because the market is closed over the weekend. Therefore, any trades made after the market closes on Friday will be executed at the next available price, which is the closing price on Monday when the market reopens.

Explanation

Trades entered on a Friday at 6:30pm will receive the closing price for Monday because the market is closed over the weekend. Therefore, any trades made after the market closes on Friday will be executed at the next available price, which is the closing price on Monday when the market reopens.

7. SMG does not permit buying stocks that trade below $____ per share.

SMG does not permit buying stocks that trade below $5.00 per share. The answer "5.00" is correct because it specifically states the exact dollar amount that is not allowed for buying stocks. The answer "5" is also correct because it represents the whole number equivalent of $5.00. Both answers accurately convey the restriction imposed by SMG on purchasing stocks below a certain price per share.

Explanation

SMG does not permit buying stocks that trade below $5.00 per share. The answer "5.00" is correct because it specifically states the exact dollar amount that is not allowed for buying stocks. The answer "5" is also correct because it represents the whole number equivalent of $5.00. Both answers accurately convey the restriction imposed by SMG on purchasing stocks below a certain price per share.

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8. Mutual funds have ticker symbols like stocks, but they are 5 letters long and end in an X.

True

False

Mutual funds indeed have ticker symbols like stocks, but there is a specific format for mutual fund ticker symbols. These symbols are typically 5 letters long and end in an X. This is done to differentiate mutual funds from individual stocks and make it easier for investors to identify and trade mutual funds in the market. Therefore, the statement "Mutual funds have ticker symbols like stocks, but they are 5 letters long and end in an X" is true.

Explanation

Mutual funds indeed have ticker symbols like stocks, but there is a specific format for mutual fund ticker symbols. These symbols are typically 5 letters long and end in an X. This is done to differentiate mutual funds from individual stocks and make it easier for investors to identify and trade mutual funds in the market. Therefore, the statement "Mutual funds have ticker symbols like stocks, but they are 5 letters long and end in an X" is true.

9. For a team "going on margin" (borrowing on the equity in your account), a _____% fee is charged for money borrowed.

The correct answer is 7%. When a team goes on margin and borrows money against the equity in their account, a fee of 7% is charged for the borrowed amount. This fee is calculated as a percentage of the borrowed money.

Explanation

The correct answer is 7%. When a team goes on margin and borrows money against the equity in their account, a fee of 7% is charged for the borrowed amount. This fee is calculated as a percentage of the borrowed money.

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10. A broker's fee of _____% is charged for all buy and sell orders.

The broker's fee for all buy and sell orders is 2% of the total amount.

Explanation

The broker's fee for all buy and sell orders is 2% of the total amount.

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11. If a team sells 200 shares of their Intel stock at $32 per share, they will be charged a broker's fee of $____ for the transaction.

The team will be charged a broker's fee of $128.00 for the transaction.

Explanation

The team will be charged a broker's fee of $128.00 for the transaction.

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12. Teams must liquidate their portfolios at the end of the Game (liquidate means selling their stock to convert it back into cash).

True

False

Teams do not have to liquidate their portfolios at the end of the game. Liquidating means selling their stocks to convert them into cash, but this is not a requirement. Teams may choose to hold onto their stocks or make other investment decisions at the end of the game. Therefore, the statement is false.

Explanation

Teams do not have to liquidate their portfolios at the end of the game. Liquidating means selling their stocks to convert them into cash, but this is not a requirement. Teams may choose to hold onto their stocks or make other investment decisions at the end of the game. Therefore, the statement is false.

13. Teams can only trade common and preferred stock on the New York Stock Exchange, Nasdaq Stock Market, and the American Stock Exchange.

True

False

This statement is false. Teams cannot trade stocks on the New York Stock Exchange, Nasdaq Stock Market, and the American Stock Exchange. These exchanges are for individual investors and institutional investors to trade stocks. Teams typically do not have the legal authority or structure to engage in stock trading.

Explanation

This statement is false. Teams cannot trade stocks on the New York Stock Exchange, Nasdaq Stock Market, and the American Stock Exchange. These exchanges are for individual investors and institutional investors to trade stocks. Teams typically do not have the legal authority or structure to engage in stock trading.

14. Teams can only enter trades between 9:00AM and 4:00PM Eastern Standard Time.

True

False

Teams can enter trades between 9:00AM and 4:00PM Eastern Standard Time. This statement is false because teams can enter trades outside of this time frame as well.

Explanation

Teams can enter trades between 9:00AM and 4:00PM Eastern Standard Time. This statement is false because teams can enter trades outside of this time frame as well.

15. Cash balances (money not yet spent) will be credited at an annual rate of ____%.

5%

7%

2%

10%

Cash balances will be credited at an annual rate of 5%. This means that any money that has not been spent will earn an interest rate of 5% per year. This could be in a savings account or any other type of investment that earns interest. By crediting cash balances at a rate of 5%, the individual or organization will be able to earn additional income on their money that is not yet spent.

Explanation

Cash balances will be credited at an annual rate of 5%. This means that any money that has not been spent will earn an interest rate of 5% per year. This could be in a savings account or any other type of investment that earns interest. By crediting cash balances at a rate of 5%, the individual or organization will be able to earn additional income on their money that is not yet spent.

16. Interest earned (and/or owed) is posted to the portfolio daily.

True

False

The statement "Interest earned (and/or owed) is posted to the portfolio daily" is incorrect. In reality, interest earned or owed is typically not posted to a portfolio on a daily basis. Instead, it is usually calculated and added or deducted at the end of a specified period, such as monthly or annually. Therefore, the correct answer is False.

Explanation

The statement "Interest earned (and/or owed) is posted to the portfolio daily" is incorrect. In reality, interest earned or owed is typically not posted to a portfolio on a daily basis. Instead, it is usually calculated and added or deducted at the end of a specified period, such as monthly or annually. Therefore, the correct answer is False.