#1
Which of the following is NOT a basic financial statement?
Balance sheet
Income statement
Cash flow statement
Profit statement
#2
What does ROI stand for in finance?
Return on Investment
Rate of Interest
Risk of Investment
Revenue on Investment
#3
What is the primary function of a stock exchange?
To provide loans to companies
To facilitate the buying and selling of securities
To regulate government bonds
To issue dividends to shareholders
#4
What does the term 'bull market' refer to in stock trading?
A market with declining prices
A market with stable prices
A market with rising prices
A market with no price changes
#5
What is the purpose of a stock split?
To decrease the number of outstanding shares
To increase the value of existing shares
To adjust the price per share by increasing the number of shares outstanding
To distribute dividends to shareholders
#6
What does the term 'dividend yield' indicate?
The total dividend payments made by a company
The ratio of dividends paid to the current stock price
The growth rate of a company's dividends
The total revenue generated by a company
#7
What is diversification in stock investment?
Investing in only one type of stock
Investing in multiple stocks within the same industry
Investing in stocks and bonds
Investing in real estate
#8
What is a 'blue-chip' stock?
A stock with a low market capitalization
A stock of a financially stable, well-established company
A stock with high volatility
A stock that is traded on the pink sheets
#9
What is the significance of the Federal Reserve in the U.S. financial system?
It regulates the stock market
It controls inflation rates
It supervises commercial banks
It sets interest rates and monetary policies
#10
What is the purpose of a stock dividend?
To increase the number of outstanding shares
To decrease the value of existing shares
To distribute profits to shareholders
To prevent dilution of ownership
#11
What is a 'blue-sky law' in finance?
A regulation that allows companies to issue stocks at any price
A law that regulates the sale of securities to protect investors from fraud
A law that prohibits investment in speculative stocks
A regulation that requires companies to disclose their financial statements
#12
What is the primary goal of fundamental analysis in stock investment?
To predict short-term price movements
To analyze historical stock prices
To evaluate a company's financial health and performance
To assess market sentiment and investor behavior
#13
What does P/E ratio stand for in stock analysis?
Price/Earnings ratio
Profit/Equity ratio
Profit/Expense ratio
Price/Expense ratio
#14
What does the term 'short selling' mean in stock trading?
Selling stocks with the intention of buying them back later at a higher price
Selling stocks without owning them in anticipation of buying them back at a lower price
Selling stocks and exiting the market permanently
Selling stocks to reduce capital gains tax
#15
What is the significance of the Securities and Exchange Commission (SEC) in the U.S.?
To manage the national debt
To oversee the stock market operations
To regulate the insurance industry
To protect investors and maintain fair and orderly markets
#16
What is the 'efficient market hypothesis' in finance?
The belief that markets are always efficient and accurately reflect all available information
The theory that markets are random and unpredictable
The concept that markets tend to be inefficient due to human biases and irrational behavior
The idea that markets can be manipulated by a few large investors
#17
What is the purpose of a stock option?
To give the holder the right to buy or sell a stock at a specific price within a specified period
To provide guaranteed dividends to shareholders
To allow shareholders to vote on corporate decisions
To determine the voting rights of shareholders