How to invest in the stock market
  • 1. What is a stock?
A) A share of ownership in a company
B) A type of bond
C) Currency
D) A government loan
  • 2. What does IPO stand for?
A) Investment Portfolio Option
B) Important Property Overview
C) Individual Profit Objective
D) Initial Public Offering
  • 3. What is a dividend?
A) A distribution of a company's earnings to shareholders
B) A trading fee
C) A government tax
D) A type of debt
  • 4. What is diversification?
A) Ignoring market news
B) Investing in a single high-risk stock
C) Borrowing heavily to invest
D) Spreading investments across different assets
  • 5. What is a stock market index?
A) A broker's commission rate
B) A measure of the performance of a group of stocks
C) A government regulation
D) A list of all available stocks
  • 6. What is a brokerage account?
A) A retirement account
B) A checking account
C) A savings account
D) An account used to buy and sell stocks
  • 7. What is a ticker symbol?
A) A brokerage fee
B) A government regulation
C) A type of market analysis
D) A unique abbreviation for a stock
  • 8. What does P/E ratio stand for?
A) Portfolio Efficiency Ratio
B) Price-to-Earnings Ratio
C) Principal-to-Equity Ratio
D) Profit-to-Expense Ratio
  • 9. What is a blue-chip stock?
A) Stock of a large, well-established company
B) Stock of a new, unproven company
C) Stock of a company in the energy sector
D) Stock of a company in the technology sector
  • 10. What is volatility?
A) The company's dividend yield
B) The number of shares available
C) The degree of price fluctuation of an asset
D) The stability of an asset's price
  • 11. What is a mutual fund?
A) A single stock purchase
B) A government bond
C) A type of currency
D) A collection of stocks, bonds, or other assets
  • 12. What is an ETF?
A) Exchange Traded Fund
B) Expense Tracking Format
C) Early Termination Fee
D) Equity Transfer Form
  • 13. What is dollar-cost averaging?
A) Investing a fixed amount regularly
B) Investing a lump sum once
C) Investing a variable amount based on market trends
D) Borrowing money to invest
  • 14. What is a limit order?
A) An order to buy or sell immediately at the best available price
B) An order to buy or sell at a specific price
C) An order to hold onto a stock
D) An order to cancel a previous order
  • 15. What is a stop-loss order?
A) An order to buy if the price rises to a certain level
B) An order to buy at any price
C) An order to sell if the price falls to a certain level
D) An order to hold the stock indefinitely
  • 16. What is risk tolerance?
A) An individual's capacity to handle potential losses
B) The guarantee of profit in the stock market
C) The amount of money invested
D) The time spent researching stocks
  • 17. What are capital gains?
A) Brokerage fees
B) Profits from selling an asset for more than its purchase price
C) Losses from selling an asset
D) Dividends paid out by a company
  • 18. What is a bull market?
A) A period of rising stock prices
B) A market with high volatility
C) A stable stock market
D) A period of falling stock prices
  • 19. What is a bear market?
A) A period of rising stock prices
B) A stable stock market
C) A period of falling stock prices
D) A market with low volatility
  • 20. What is inflation?
A) A general increase in prices
B) A stable price level
C) The value of a stock
D) A decrease in prices
  • 21. What is a growth stock?
A) Stock of a company with slow growth
B) Stock of a company expected to grow rapidly
C) Stock that pays high dividends
D) Stock of a bankrupt company
  • 22. What is a value stock?
A) Stock of a new company
B) Stock with a high P/E ratio
C) Stock believed to be trading below its intrinsic value
D) Stock that's guaranteed to increase in price
  • 23. What is fundamental analysis?
A) Randomly picking stocks
B) Following social media trends
C) Analyzing a company's financial statements
D) Predicting stock prices based on charts
  • 24. What is technical analysis?
A) Analyzing stock price charts and patterns
B) Analyzing a company's financial statements
C) Ignoring market data
D) Following gut feelings
  • 25. What is short selling?
A) Holding onto a stock for a long period
B) Buying a stock with the expectation it will rise in value
C) Borrowing and selling a stock, hoping to buy it back at a lower price
D) Giving away stocks
  • 26. What is a margin account?
A) An account that guarantees profits
B) A savings account specifically for stock market investments
C) An account where you borrow money from a broker to invest
D) A regular brokerage account using only your own funds
  • 27. What is insider trading?
A) Trading using a registered broker
B) Trading with the company's permission
C) Trading based on non-public, confidential information
D) Trading based on publicly available information
  • 28. What is a Roth IRA?
A) A standard brokerage account with no tax advantages
B) A savings account with a high interest rate
C) A retirement account where contributions are made before tax, and withdrawals in retirement are taxed
D) A retirement account where contributions are made after tax, and withdrawals in retirement are tax-free
  • 29. What is a 401(k)?
A) A retirement savings plan offered by employers
B) A type of health insurance plan
C) A college savings account
D) A government-sponsored investment program
  • 30. What does it mean to rebalance your portfolio?
A) Adjusting your asset allocation to maintain your desired risk level
B) Ignoring your portfolio performance
C) Investing all your money in a single stock
D) Selling all your stocks and buying bonds
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