#1
Which type of order allows investors to buy or sell a stock at the current market price?
Market Order
ExplanationImmediate execution at prevailing market prices.
#2
What is the term for a situation where a trader loses more money than they initially invested?
Margin Call
ExplanationDemand by a broker for additional funds when an investment's value decreases.
#3
What does the term 'Blue Chip Stocks' refer to in the stock market?
Stocks of well-established and financially stable companies
ExplanationShares of large, reputable companies with a history of reliable performance.
#4
What is the purpose of a stock split?
To increase the number of outstanding shares
ExplanationDividing existing shares into multiple shares to decrease the price per share.
#5
What is the term for a measure of a stock's volatility in relation to the market?
Beta
ExplanationIndicates how a stock's price moves relative to the market.
#6
Who regulates the securities industry in the United States?
SEC (Securities and Exchange Commission)
ExplanationGovernment agency overseeing securities markets and enforcing regulations.
#7
In stock market terminology, what does the acronym ETF stand for?
Exchange Traded Fund
ExplanationInvestment fund traded on stock exchanges, holding assets like stocks or bonds.
#8
Which financial instrument represents a share in the ownership of a company and a claim on part of its assets and earnings?
Stocks
ExplanationOwnership stake in a corporation, representing proportionate ownership.
#9
What does the term 'IPO' stand for in the context of the stock market?
Initial Public Offering
ExplanationFirst sale of stock by a private company to the public.
#10
What is the primary function of a stockbroker?
Executing stock trades on behalf of clients
ExplanationFacilitating buying and selling of securities for investors.
#11
What does the term 'Bear Market' refer to in the context of the stock market?
A market characterized by declining prices
ExplanationExtended period of falling stock prices, typically accompanied by pessimism.
#12
Which financial ratio measures a company's ability to cover its short-term obligations with its short-term assets?
Current Ratio
ExplanationIndicator of a company's liquidity and ability to pay short-term debts.