#1
Which of the following is a fundamental principle of finance?
Risk aversion
Speculation
Gambling
Luck
#2
What does the term 'ROI' stand for in investment?
Rate of Inflation
Return on Investment
Risk of Investment
Revenue of Income
#3
What does the term 'PE ratio' represent in finance?
Price-to-Earnings ratio
Profit-to-Equity ratio
Portfolio Efficiency ratio
Price-to-Expense ratio
#4
Which of the following is NOT a type of investment risk?
Inflation risk
Credit risk
Market risk
Profit risk
#5
What does the term 'dividend yield' indicate in finance?
The percentage of dividends paid relative to the stock price
The change in stock price over a period
The total dividends earned in a year
The average dividend payout ratio
#6
Which investment strategy aims to minimize risk by spreading investments across different assets?
Day trading
Value investing
Diversification
Short selling
#7
What is the formula to calculate compound interest?
P × (1 + r)
P × r × t
P × (1 + r)^t
P / (1 + r)
#8
What is the primary goal of asset allocation?
Maximizing returns
Minimizing risk
Achieving financial independence
Beating the market
#9
In the context of investment, what does the term 'liquidity' refer to?
Ease of converting assets into cash
Total assets owned by an individual
Long-term investment potential
Potential returns on investment
#10
What is the primary objective of fundamental analysis in investing?
Evaluating market sentiment
Analyzing company financials and economic factors
Predicting short-term price movements
Timing market entry and exit
#11
Which financial theory suggests that an investor cannot consistently achieve returns in excess of average market returns?
Efficient market hypothesis
Modern portfolio theory
Random walk theory
Capital asset pricing model
#12
Which investment strategy involves buying and holding securities for the long term, regardless of market fluctuations?
Day trading
Value investing
Swing trading
Arbitrage
#13
What does the term 'alpha' represent in portfolio management?
The measure of risk-adjusted return
The correlation coefficient of a security with the market
The excess return of an investment over its benchmark
The sensitivity of a security's returns to market movements
#14
What is the primary focus of technical analysis in investing?
Economic indicators
Historical price and volume data
Company financial statements
Market psychology
#15
What does the term 'margin call' refer to in investing?
A request for additional funds to cover losses
The interest charged on borrowed funds
The initial amount required to open a margin account
The profit earned from margin trading