#1
What does the term 'Blue Chip Stocks' refer to in the context of investment?
Stocks issued by newly established companies
Stocks of small-cap companies
Stocks of well-established companies with a history of stable earnings
Stocks of companies with high market volatility
#2
What is the primary function of a stock exchange?
To provide loans to investors
To facilitate the trading of securities between buyers and sellers
To provide financial advice to corporations
To regulate the financial markets
#3
Which of the following is a characteristic of a growth stock?
Low price-to-earnings ratio (P/E ratio)
Stable and consistent dividend payments
High potential for capital appreciation
Low volatility
#4
In the context of securities markets, what does the term 'Liquidity' refer to?
The ease of converting an asset into cash without affecting its market price
The total value of assets held by a company
The profitability of a company
The ability of a company to pay off its debts
#5
What is the role of a stockbroker in securities trading?
To regulate the stock market
To provide investment advice to clients
To facilitate buying and selling of securities on behalf of clients
To set stock prices
#6
What does the term 'IPO' stand for in the context of securities markets?
Initial Public Offering
Initial Portfolio Offering
Initial Private Offering
International Portfolio Opportunity
#7
Which of the following is considered a primary market transaction?
Buying shares of a newly issued IPO (Initial Public Offering)
Buying shares of a company from another investor
Trading stocks on the stock exchange
Buying shares of a mutual fund
#8
Which of the following is NOT a characteristic of a bond?
Ownership stake in the issuing company
Fixed interest payments
Maturity date
Face value
#9
What is the role of a financial regulator in the securities market?
To maximize profits for investors
To ensure fair and transparent trading practices
To provide investment advice to individual investors
To manipulate stock prices
#10
What is the purpose of diversification in an investment portfolio?
To concentrate investment in a single asset class
To reduce risk by investing in a variety of assets
To maximize returns by investing only in high-risk assets
To avoid investing in the stock market
#11
Which of the following is NOT a type of investment fund?
Hedge fund
Mutual fund
Exchange-Traded Fund (ETF)
Stock index
#12
What does the term 'Short Selling' mean in securities trading?
Buying a security with the intention of holding it for the long term
Selling a security that the seller does not own, with the intention of buying it back at a lower price
Investing in securities with high liquidity
Investing in securities with high volatility
#13
What does the term 'Dividend Yield' indicate?
The percentage of profits reinvested by the company
The percentage of total assets paid out as dividends
The annual dividend income per share divided by the stock's current market price
The annual dividend income per share divided by the total assets of the company
#14
What is the significance of the Efficient Market Hypothesis (EMH) in finance?
It suggests that stock prices reflect all available information and are therefore impossible to predict consistently
It proposes that investors should actively try to time the market for maximum profits
It emphasizes the importance of insider trading for accurate investment decisions
It suggests that stock prices are driven solely by investor sentiment
#15
What is the primary objective of an investor who follows a 'Value Investing' strategy?
To invest in high-risk, high-reward assets
To invest based on market trends and momentum
To invest in undervalued assets with the expectation of long-term growth
To invest in assets solely based on their historical performance
#16
Which of the following is NOT a factor that affects bond prices?
Interest rates
Credit rating of the issuer
Maturity date
Earnings per share of the issuer