#1
What does IPO stand for in the context of the stock market?
Initial Public Offering
ExplanationThe first sale of stock by a private company to the public.
#2
What is the term for a sudden, significant drop in the value of a stock or the stock market as a whole?
Crash
ExplanationA rapid and severe decline in stock prices.
#3
What is the term for a situation where a company uses its profits to buy back its own shares from the market?
Stock Repurchase
ExplanationWhen a company buys back its own shares from the open market.
#4
What does the term 'volatility' refer to in the context of the stock market?
The measure of how much a stock's price fluctuates
ExplanationThe degree of variation in trading price series over time.
#5
What is the term for the simultaneous buying and selling of the same security on different exchanges to profit from price discrepancies?
Arbitrage
ExplanationExploiting price differences for the same asset in different markets.
#6
What does P/E ratio stand for in stock market analysis?
Price to Earnings Ratio
ExplanationA valuation ratio of a company's current share price compared to its per-share earnings.
#7
Which of the following best describes a 'blue chip' stock?
Stock of a large, stable, and financially sound company
ExplanationShares of a company with a history of reliable performance and solid financials.
#8
In stock market terminology, what does 'Bullish' mean?
Expecting the price of a stock or the market as a whole to rise
ExplanationAn optimistic outlook on the market or a particular asset.
#9
What is the 'beta' of a stock used to measure?
The extent to which a stock's returns move in relation to the market
ExplanationA measure of a stock's volatility in relation to the market.
#10
What is the term for a period of generally rising prices in the stock market?
Bull Market
ExplanationA market condition where prices are rising or are expected to rise.
#11
What is the purpose of a limit order in stock trading?
To set a specific price at which a security will be bought or sold
ExplanationAn order to buy or sell a stock at a specified price or better.
#12
What does 'market capitalization' of a company represent?
The total value of outstanding shares of a company
ExplanationThe market value of a company's outstanding shares.
#13
What is the term for a financial instrument that derives its value from the performance of an underlying asset, index, or security?
Derivative
ExplanationContracts whose value is derived from the performance of an underlying entity.
#14
What does the term 'market capitalization' represent?
The total value of outstanding shares of a company
ExplanationThe market value of a company's outstanding shares.