#1
What does the acronym 'NYSE' stand for in the context of financial markets?
New York Stock Exchange
ExplanationPrimary stock exchange in the United States
#2
What is the primary function of a stock exchange?
To facilitate the trading of stocks and other securities
ExplanationFacilitates buying and selling of financial instruments
#3
What does the term 'bull market' signify in financial markets?
A period of rising stock prices
ExplanationMarket where prices are generally rising
#4
What is the role of a 'broker' in financial markets?
To facilitate buying and selling of securities
ExplanationActs as intermediary between buyers and sellers
#5
What is the purpose of a 'stop-loss order' in investing?
To limit losses by selling a security when it reaches a certain price
ExplanationPrevents further losses by triggering sale at a predetermined price
#6
What is the term for a financial instrument that represents ownership in a company?
Stock
ExplanationOwnership share in a corporation
#7
What does the term 'diversification' refer to in investment?
Investing in multiple asset classes to reduce risk
ExplanationSpreading investments across different assets
#8
What does the term 'liquidity' refer to in financial markets?
The ability to convert assets into cash quickly without significant loss of value
ExplanationEase of converting assets into cash
#9
What is the 'efficient market hypothesis' (EMH) in finance?
A theory suggesting that markets always reflect all available information
ExplanationMarkets quickly incorporate all available information
#10
What does the term 'beta' represent in finance?
A measure of a stock's market risk relative to the overall market
ExplanationVolatility of a stock compared to the market
#11
Which of the following is a measure of a company's profitability?
EPS (Earnings Per Share)
ExplanationProfit allocated to each outstanding share of common stock
#12
What does the term 'asset allocation' mean in investment?
The process of dividing investments among different asset classes
ExplanationDistribution of investments across various asset types
#13
What is 'arbitrage' in financial markets?
The process of buying and selling securities to profit from price discrepancies in different markets
ExplanationExploiting price differences for profit
#14
What does the term 'hedge' mean in investing?
To mitigate risk by offsetting potential losses in one investment with gains in another
ExplanationStrategy to minimize risk
#15
What is 'market capitalization'?
The total number of shares outstanding multiplied by the current market price per share
ExplanationValue of a company determined by stock price and outstanding shares