Following the Crash of 1929, the Stock Market

question 7

Multiple Choice

Following the Crash of 1929, the stock market:

• A) began to slowly, but steadily, increase in value.
• B) was flat for about three years and then began a slow, steady rise to pre-crash values.
• C) continued to decline slightly before increasing over a 3-year period to its pre-crash values.
• D) temporarily increased in value and then began a 3-year decline to ten percent of its pre-crash value.
• E) recouped its 90 percent loss within the following three years.

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Definitions:

Cash Dividends

Payments made to shareholders out of a corporation's earnings in the form of cash.

Stable Earnings

Earnings that show little variability and predictability over a period, indicative of financial stability in a company.

Preferred Stock

A type of stock that generally provides dividends to its holders before dividends are issued to common stockholders, and typically has rights to assets before common stock upon liquidation.

Organization Cost

An intangible asset that records the initial cost of forming the corporation, such as legal and incorporating fees. Today, it is being expensed.