Stock Market Test

1. What is compounding?

Earning returns on previous returns over time Losing money automatically A market closure A broker fee

2. What is diversification?

Putting all money in one company Buying only one stock Avoiding all investing Spreading investments across different assets to reduce risk

3. What is a limit order?

A dividend payment An order that guarantees profit An order to buy or sell at a specific price or better A tax filing order

4. What is the stock market?

A physical bank vault A marketplace where shares are bought and sold A crypto mining system A tax office

5. What is liquidity in the stock market?

How many emails a broker sends How much cash a company has only How many employees a company has How easily a stock can be bought or sold

6. Why should investors avoid emotional decisions?

Emotions guarantee better returns Emotions replace research Emotions can lead to panic selling or chasing hype Emotions remove risk

7. What is a dividend stock?

A stock that never pays investors A stock that pays regular income to shareholders A stock with no company behind it A stock that only trades once a year

8. What is long-term investing?

Only trading after market close Avoiding all risk Buying and selling every minute Holding investments for years with a focus on growth over time

9. What does it mean to own shares of a company?

You own a small part of that company You owe the company money You become the CEO automatically You own the entire company

10. What does IPO stand for?

International Payment Option Initial Public Offering Internal Profit Operation Investment Price Order

11. Which of these is a major U.S. stock exchange?

Coinbase Wallet NYSE Federal Reserve App Western Union

12. What is fundamental analysis?

Only guessing prices Studying a company’s financial health and business value Only following social media Only looking at chart patterns

13. What is a small-cap stock?

A stock that cannot be traded A stock owned only by the government A stock from a smaller company with lower market capitalization A stock with a guaranteed return

14. What is the P/E ratio?

Price-to-earnings ratio Public equity return Premium earnings report Profit-exchange ratio

15. What is a brokerage account?

A company payroll account A crypto mining account A checking account only An account used to buy and sell investments

16. What is the Nasdaq Composite known for?

Many technology and growth-oriented companies Only banks Only government bonds Only oil companies

17. What is bid price?

A company dividend The highest price a buyer is willing to pay The lowest price a seller will accept A tax amount

18. Which sector includes software, chips, and artificial intelligence companies?

Technology Consumer Staples Utilities Real Estate

19. What is a stock?

A government tax form A share of ownership in a company A bank loan A crypto wallet

20. What is the bid-ask spread?

A tax rule The difference between the bid and ask price A company’s revenue The difference between stocks and bonds only

21. Why do companies sell stock?

To raise capital for growth, operations, or debt repayment To close the business To avoid having customers To remove investors

22. Why do investors study company earnings?

To guarantee profit To avoid reading financials To remove market risk To understand profitability and business performance

23. What is a large-cap company?

A company with no employees A company with a large market capitalization A company that cannot trade publicly A company that only sells bonds

24. What can move stock prices?

Only company logos Only market holidays Only broker passwords Earnings, news, supply and demand, and economic conditions

25. How can investors make money from stocks?

Only through salary payments Only through tax refunds Only through bank interest Price appreciation and dividends