If fractions scare you, you don't have to worry about judging stock values, since stocks are now priced in decimals. Knowing how stocks are priced and traded can help you make better investment decisions. Take this quiz to see how much you know why the stock market changed from fractions to decimals.
In the year 1792, the New York Stock Exchange came into existence.
Spain was a model for the New York Stock Exchange.
In 1792, 24 American bankers, brokers and merchants signed the agreement which established the New York Stock Exchange.
A real was a Spanish silver dollar. The real was divided into two, four or eight pieces.
Spaniards used their fingers to count, minus the thumbs.
The dollar's value was based on the Spanish real.
The decimal system is based on units of 10. When using fingers as an early calculator, this system, unlike the Spanish system, included the thumbs.
The smallest change in stock price was an eighth of a dollar.
In 1997, with the signing of the Common Cents Pricing Act, fractions were converted to decimals.
The decimalization of the stock market began in August of 2000.
A stock spread is the smallest amount of money a stock can change in value.
Decimalization will make stock prices easier to calculate.
Stock spreads may be as small as one penny.
They became much easier to calculate, especially after some spreads had spread to sixty-fourths.
The decimal equivalent of three-eighths is 0.375.