#1
What is the definition of 'dividend' in finance?
The amount of money borrowed from a financial institution.
The total profit earned by a company.
A portion of a company's earnings paid to shareholders.
The price paid for a stock in the market.
#2
What does ROI stand for in finance?
Return on Investment
Rate of Interest
Risk of Investment
Revenue of Income
#3
What does the term 'bull market' refer to?
A market condition where prices are falling.
A market condition where prices are rising.
A market condition characterized by high volatility.
A market condition where trading is halted.
#4
What does the term 'liquidity' refer to in financial markets?
The ability to quickly convert an asset into cash without significant loss of value.
The total amount of money invested in the stock market.
The total debt owed by a company.
The difference between a company's assets and liabilities.
#5
What is the primary function of an investment bank?
To provide loans to individuals and businesses.
To facilitate the buying and selling of securities for clients.
To insure investors against losses in the stock market.
To manage mutual funds for individual investors.
#6
Which of the following is considered a 'defensive stock'?
A stock of a company in a cyclical industry.
A stock of a company in the technology sector.
A stock of a company in the healthcare sector.
A stock of a company in the entertainment sector.
#7
What does the 'beta' of a stock measure?
The stock's volatility relative to the market.
The stock's price-to-earnings ratio.
The stock's dividend yield.
The stock's market capitalization.
#8
What is the meaning of 'market capitalization'?
The total value of all assets owned by a company.
The total debt owed by a company.
The total number of shares outstanding multiplied by the current market price per share.
The total revenue generated by a company in a fiscal year.
#9
What is the primary goal of portfolio diversification?
To maximize returns.
To minimize taxes.
To minimize risk.
To maximize leverage.
#10
What is the 'P/E ratio' of a stock?
Price to Earnings ratio
Profit to Earnings ratio
Portfolio to Earnings ratio
Price to Equity ratio
#11
What is the 'yield' of a bond?
The annual interest rate paid by the bond issuer.
The annual dividend paid by the bond issuer.
The price appreciation of the bond over time.
The bond's duration until maturity.
#12
What is 'asset allocation' in investment?
The process of selecting individual stocks for a portfolio.
The distribution of investments across different asset classes.
The analysis of a company's financial statements.
The calculation of a bond's yield to maturity.
#13
What is 'arbitrage' in the context of finance?
The practice of investing in high-risk assets.
The process of buying and selling securities simultaneously to profit from price discrepancies in different markets.
The use of financial derivatives to hedge against market risks.
The process of borrowing money to invest in the stock market.
#14
What does 'liquidity risk' refer to in finance?
The risk of loss due to changes in interest rates.
The risk of loss due to fluctuations in the stock market.
The risk of loss due to the inability to sell an asset quickly without significantly affecting its price.
The risk of loss due to changes in currency exchange rates.
#15
What is the 'efficient market hypothesis' (EMH) in finance?
A theory suggesting that asset prices reflect all available information and are therefore always accurately priced.
A theory suggesting that markets are inefficient due to irrational investor behavior.
A theory suggesting that markets are efficient only in the long term.
A theory suggesting that asset prices are influenced by random events.
#16
What is 'alpha' in finance?
A measure of a portfolio's risk-adjusted return compared to a benchmark index.
The rate of change of an option's price relative to a one percent change in the underlying asset's price.
The interest rate at which banks lend to their most creditworthy customers.
A measure of a bond's sensitivity to changes in interest rates.
#17
What does 'volatility index (VIX)' measure?
The average price of options on the S&P 500 index.
The volatility of individual stocks in the market.
The level of risk in the bond market.
The level of risk in the stock market based on options prices.