How to invest in the stock market
  • 1. What is a stock?
A) A type of bond
B) Currency
C) A government loan
D) A share of ownership in a company
  • 2. What does IPO stand for?
A) Investment Portfolio Option
B) Initial Public Offering
C) Individual Profit Objective
D) Important Property Overview
  • 3. What is a dividend?
A) A distribution of a company's earnings to shareholders
B) A government tax
C) A trading fee
D) A type of debt
  • 4. What is diversification?
A) Borrowing heavily to invest
B) Spreading investments across different assets
C) Ignoring market news
D) Investing in a single high-risk stock
  • 5. What is a stock market index?
A) A list of all available stocks
B) A government regulation
C) A broker's commission rate
D) A measure of the performance of a group of stocks
  • 6. What is a brokerage account?
A) A savings account
B) An account used to buy and sell stocks
C) A retirement account
D) A checking account
  • 7. What is a ticker symbol?
A) A type of market analysis
B) A brokerage fee
C) A government regulation
D) A unique abbreviation for a stock
  • 8. What does P/E ratio stand for?
A) Portfolio Efficiency Ratio
B) Profit-to-Expense Ratio
C) Price-to-Earnings Ratio
D) Principal-to-Equity Ratio
  • 9. What is a blue-chip stock?
A) Stock of a new, unproven company
B) Stock of a company in the technology sector
C) Stock of a company in the energy sector
D) Stock of a large, well-established company
  • 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) Expense Tracking Format
B) Exchange Traded Fund
C) Early Termination Fee
D) Equity Transfer Form
  • 13. What is dollar-cost averaging?
A) Investing a fixed amount regularly
B) Investing a variable amount based on market trends
C) Investing a lump sum once
D) Borrowing money to invest
  • 14. What is a limit order?
A) An order to cancel a previous order
B) An order to buy or sell immediately at the best available price
C) An order to buy or sell at a specific price
D) An order to hold onto a stock
  • 15. What is a stop-loss order?
A) An order to sell if the price falls to a certain level
B) An order to buy if the price rises to a certain level
C) An order to hold the stock indefinitely
D) An order to buy at any price
  • 16. What is risk tolerance?
A) The time spent researching stocks
B) The amount of money invested
C) The guarantee of profit in the stock market
D) An individual's capacity to handle potential losses
  • 17. What are capital gains?
A) Dividends paid out by a company
B) Profits from selling an asset for more than its purchase price
C) Brokerage fees
D) Losses from selling an asset
  • 18. What is a bull market?
A) A market with high volatility
B) A period of rising stock prices
C) A period of falling stock prices
D) A stable stock market
  • 19. What is a bear market?
A) A market with low volatility
B) A period of rising stock prices
C) A period of falling stock prices
D) A stable stock market
  • 20. What is inflation?
A) The value of a stock
B) A general increase in prices
C) A decrease in prices
D) A stable price level
  • 21. What is a growth stock?
A) Stock of a bankrupt company
B) Stock of a company with slow growth
C) Stock that pays high dividends
D) Stock of a company expected to grow rapidly
  • 22. What is a value stock?
A) Stock believed to be trading below its intrinsic value
B) Stock that's guaranteed to increase in price
C) Stock of a new company
D) Stock with a high P/E ratio
  • 23. What is fundamental analysis?
A) Predicting stock prices based on charts
B) Following social media trends
C) Analyzing a company's financial statements
D) Randomly picking stocks
  • 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) An account where you borrow money from a broker to invest
C) A savings account specifically for stock market investments
D) A regular brokerage account using only your own funds
  • 27. What is insider trading?
A) Trading with the company's permission
B) Trading using a registered broker
C) Trading based on publicly available information
D) Trading based on non-public, confidential 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 type of health insurance plan
B) A government-sponsored investment program
C) A college savings account
D) A retirement savings plan offered by employers
  • 30. What does it mean to rebalance your portfolio?
A) Selling all your stocks and buying bonds
B) Adjusting your asset allocation to maintain your desired risk level
C) Investing all your money in a single stock
D) Ignoring your portfolio performance
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