#1
Which of the following is considered a liquid asset?
Savings account
ExplanationEasily convertible to cash.
#2
What does ROI stand for in finance?
Return On Investment
ExplanationMeasurement of profitability.
#3
What does the term 'bull market' refer to in finance?
A market where prices are rising
ExplanationPeriod of increasing asset prices.
#4
What is the primary function of a stock exchange?
To facilitate buying and selling of securities
ExplanationMarketplace for trading stocks.
#5
What is the purpose of a stop-loss order in trading?
To sell stocks at a specific price to limit losses
ExplanationPrevent excessive losses.
#6
Which of the following is NOT a type of investment account?
Checking account
ExplanationPrimarily for transactional purposes.
#7
What is the purpose of diversification in investment?
To reduce risk
ExplanationSpreading investments to minimize losses.
#8
What does the term 'asset allocation' refer to in investment?
Spreading investment across different asset classes
ExplanationDistributing investments for balance.
#9
Which of the following is NOT a factor affecting interest rates?
Global stock market performance
ExplanationNot directly tied to monetary policy.
#10
What is the role of a financial advisor?
To provide guidance on investment decisions
ExplanationOffer expertise for financial planning.
#11
What does the P/E ratio measure?
Price to earnings
ExplanationValuation metric for stocks.
#12
What does the term 'market capitalization' measure?
The total value of a company's outstanding shares
ExplanationReflects company size in the market.
#13
What does the term 'volatility' refer to in finance?
The tendency of market prices to fluctuate
ExplanationDegree of price variability.
#14
What is the significance of the Federal Reserve in the U.S. financial system?
It controls the money supply and interest rates
ExplanationCentral bank's regulatory role.
#15
What does the term 'capital gain' refer to?
Profit earned by selling an asset for more than its purchase price
ExplanationProfit from asset appreciation.