How to invest in the stock market
  • 1. What is a stock?
A) A type of bond
B) A share of ownership in a company
C) Currency
D) A government loan
  • 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 trading fee
B) A government tax
C) A distribution of a company's earnings to shareholders
D) A type of debt
  • 4. What is diversification?
A) Borrowing heavily to invest
B) Ignoring market news
C) Spreading investments across different assets
D) Investing in a single high-risk stock
  • 5. What is a stock market index?
A) A government regulation
B) A measure of the performance of a group of stocks
C) A list of all available stocks
D) A broker's commission rate
  • 6. What is a brokerage account?
A) A retirement account
B) An account used to buy and sell stocks
C) A savings account
D) A checking account
  • 7. What is a ticker symbol?
A) A government regulation
B) A type of market analysis
C) A unique abbreviation for a stock
D) A brokerage fee
  • 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 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 number of shares available
B) The degree of price fluctuation of an asset
C) The stability of an asset's price
D) The company's dividend yield
  • 11. What is a mutual fund?
A) A government bond
B) A type of currency
C) A single stock purchase
D) A collection of stocks, bonds, or other assets
  • 12. What is an ETF?
A) Exchange Traded Fund
B) Early Termination Fee
C) Expense Tracking Format
D) Equity Transfer Form
  • 13. What is dollar-cost averaging?
A) Investing a variable amount based on market trends
B) Investing a lump sum once
C) Borrowing money to invest
D) Investing a fixed amount regularly
  • 14. What is a limit order?
A) An order to cancel a previous order
B) An order to hold onto a stock
C) An order to buy or sell immediately at the best available price
D) An order to buy or sell at a specific price
  • 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 at any price
C) An order to hold the stock indefinitely
D) An order to buy if the price rises to a certain level
  • 16. What is risk tolerance?
A) The time spent researching stocks
B) The amount of money invested
C) An individual's capacity to handle potential losses
D) The guarantee of profit in the stock market
  • 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 stable stock market
C) A period of falling stock prices
D) A period of rising stock prices
  • 19. What is a bear market?
A) A period of rising stock prices
B) A period of falling stock prices
C) A stable stock market
D) A market with low volatility
  • 20. What is inflation?
A) A general increase in prices
B) A stable price level
C) A decrease in prices
D) The value of a stock
  • 21. What is a growth stock?
A) Stock of a company with slow growth
B) Stock that pays high dividends
C) Stock of a company expected to grow rapidly
D) Stock of a bankrupt company
  • 22. What is a value stock?
A) Stock with a high P/E ratio
B) Stock believed to be trading below its intrinsic value
C) Stock of a new company
D) Stock that's guaranteed to increase in price
  • 23. What is fundamental analysis?
A) Following social media trends
B) Analyzing a company's financial statements
C) Randomly picking stocks
D) Predicting stock prices based on charts
  • 24. What is technical analysis?
A) Analyzing stock price charts and patterns
B) Following gut feelings
C) Analyzing a company's financial statements
D) Ignoring market data
  • 25. What is short selling?
A) Buying a stock with the expectation it will rise in value
B) Holding onto a stock for a long period
C) Giving away stocks
D) Borrowing and selling a stock, hoping to buy it back at a lower price
  • 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 based on publicly available information
B) Trading with the company's permission
C) Trading using a registered broker
D) Trading based on non-public, confidential information
  • 28. What is a Roth IRA?
A) A savings account with a high interest rate
B) A standard brokerage account with no tax advantages
C) A retirement account where contributions are made after tax, and withdrawals in retirement are tax-free
D) A retirement account where contributions are made before tax, and withdrawals in retirement are taxed
  • 29. What is a 401(k)?
A) A college savings account
B) A type of health insurance plan
C) A retirement savings plan offered by employers
D) A government-sponsored investment program
  • 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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