#1
What is the primary function of a stock exchange?
To provide loans to businesses
To facilitate buying and selling of securities
To regulate government bonds
To offer insurance services
#2
What is the purpose of a 'bull market' in financial terms?
A market where bearish sentiment dominates
A market characterized by rising prices and positive investor sentiment
A market with low trading volume
A market focused on commodities
#3
What is the primary function of a central bank in a country's financial system?
Issuing currency and controlling monetary policy
Providing loans to commercial banks
Regulating stock exchanges
Facilitating international trade
#4
What is the purpose of a futures contract in financial markets?
To buy or sell an asset at a predetermined price on a future date
To invest in mutual funds
To secure a loan from a bank
To issue government bonds
#5
What does the term 'liquidity' mean in the context of financial markets?
The ease with which an asset can be quickly bought or sold without affecting its price
The total value of assets held by an individual or institution
The interest rate set by central banks
The amount of debt a company has compared to its equity
#6
Which financial instrument represents a loan made by an investor to a government or corporation?
Stock
Bond
Derivative
Option
#7
What does the term 'IPO' stand for in the context of financial markets?
International Portfolio Offering
Initial Public Offering
Investment Policy Outline
Institutional Purchase Order
#8
In the context of investment, what does the acronym ROI stand for?
Return on Investment
Risk of Inflation
Rate of Interest
Revenue from Operations
#9
Which financial term refers to a measure of a company's profitability, calculated as net income divided by shareholder equity?
Earnings Before Interest and Taxes (EBIT)
Price-Earnings Ratio (P/E Ratio)
Return on Equity (ROE)
Dividend Yield
#10
Which of the following is a characteristic of a mutual fund?
Traded on stock exchanges
Managed by a fund manager
Has a fixed maturity period
Provides insurance coverage
#11
What does the term 'blue-chip stocks' refer to in the stock market?
Low-priced stocks with high growth potential
Stocks of well-established and financially stable companies
Technology sector stocks
Stocks with a high beta value
#12
What is the role of an investment bank in the financial market?
Providing loans to individuals
Managing government budgets
Facilitating mergers and acquisitions
Issuing currency
#13
Which financial term refers to the measure of how much an investment's return fluctuates over a period?
Liquidity
Beta
Yield
Dividend
#14
What is the function of a 'stop-loss order' in trading?
To automatically sell a security when its price falls to a certain level
To execute a buy order at a specified price
To freeze the trading account temporarily
To increase the profit margin
#15
What does the term 'asset allocation' refer to in the context of investment portfolios?
Distributing income among shareholders
Determining the mix of different asset classes in a portfolio
Selling off non-performing assets
Calculating the net asset value
#16
In the context of options trading, what is the 'strike price' of an option?
The price at which an option is currently trading
The price at which the underlying asset can be bought or sold
The closing price of a stock
The maximum price a trader is willing to pay for an option
#17
What is the significance of the Efficient Market Hypothesis (EMH) in finance?
It suggests that markets are always inefficient
It states that it is impossible to beat the market consistently
It promotes active trading strategies
It supports the idea of market manipulation