Stock Trading MCQ Questions Answers

1. The nash equilibrium of a prisoners' dilemma game is that ______.

2. If a stock is correctly priced, then you know that ____________.

3. Choosing stocks by searching for predictable patterns in stock prices is called ________.

4. The semistrong form of the emh states that ________ must be reflected in the current stock price.

5. What does a primary trend typically do?

6. Which one would not be a stock trading goal?

7. Why do goals have to be specific?

8. Term used for selling a stock without owning the stock?

9. Purpose of setting trading goals?

10. Which one is an assumption made by a technical analyst?

11. What is meant by 'diversification'?

12. Why is it important for an investor to know their risk tolerance level before trading stocks and investing in general?

13. What is meant by a 'day order'?

14. Way for a trader to track their progress towards their goals?

15. Which one is an indication of market decline?

16. What does the saying 'buy low sell high' mean?

17. Why is an investor unlikely to hold growth, value, small cap, and index portfolios all at once?

18. Difference between a stock trader and a stock investor?

19. What stage of the market cycle is characterized by product exploration?

20. When the stock market is moving upwards consistently, what may temporarily happen?

21. Which analysis relies on charting?

22. Primary method to mitigate risk?

23. Why are younger people more apt to take on riskier investments?

24. What transaction is a limit order?

25. Most important principle to be followed in goal setting?

26. What is 'capitalization'?

27. What impact does the 'herd' have on market trends?

28. How is risk measured?

29. Relationship between fundamental and technical analyses?

30. Acronym 'OTCBB' stand for?

31. What is a secular trend?

32. What would credit risk be used to assess?

33. In a bear market, Short term rally referred to as?

34. What is the 'date of declaration' with reference to stocks?

35. Why do investors often expect stock prices to rise at the beginning of the year?

36. What is a sudden and unexpected drop in stock prices on the stock market referred to as?

37. What is meant by a 'lagging indicator'?

38. Ideal number of portfolios for an experienced trader?

39. Why stock trader want to create various portfolios?

40. Is a stop loss order a buy or sell order?

41. What's the appropriate order to place in the following example?

42. Primary theory behind fundamental analysis?

43. Which one is an advantage of having multiple portfolios instead of only one?

44. Preferred way to classify various portfolios?

45. What is meant by using the straddle stock trading strategy?

46. Duration of a market cycle?

47. What is meant by 'day trading'?

48. What is a 'speculative stock'?

49. What would a company at the peak of the business cycle consider doing?

50. Good example of risk mitigation?

51. When is the straddle trading strategy appropriate?

52. What form of analysis would a 'Value Investor' utilize to identify stock opportunities?

53. Purpose of a stop loss order?

54. What happens to a stop loss order when the trigger price is reached?

55. How can a trader implement a goal always to earn 10% on stocks, and never to lose more than 2%?

56. Which is not one of the cycles in the market?

57. What market stage would a company focus on for increasing sales?

58. What is meant by 'technical analysis'?

59. What is portfolio management?

60. Why would a trader liquidate a portfolio?

61. Primary goal of technical analysis?

62. Why would an investor use a limit order to buy?

63. What factors does technical analysis primarily rely on?

64. Why is it important to recognize what stage of the market cycle a company is in?

65. What would be the appropriate limit price for the following example: A stock is currently trading at $20, and the investor believes he can buy it for 10% less.

66. Obstacles to achieving stock trading goals?

67. What 's the risk tolerance level of a retired government worker in general?

68. What is meant by 'stop loss order'?

69. Why should goals be changeable?

70. What should a trader do if one portfolio is outperforming another?

71. How can market cycles be utilized in trading stocks?

72. What do decreasing interest rates typically mean for the stock market?

73. Why would an investor not utilize a stock trading strategy?

74. Which would be a stock trading goal?

75. What is a 'trailing stop' order?

76. What strategy would an investor with a short time frame most likely use?

77. Why would an investor invest only in companies which have a history of paying dividends?

78. What is the type of analysis conducted using past earnings, past stock prices, and other qualitative and quantitative facts about a company called?

79. Another name for a market cycle?

80. What is meant by a 'margin account'?

81. How often should a trader revaluate the holdings in their portfolios?

82. What is the 'gap' trading strategy?

83. Which would a fundamental analyst examine?

84. Purpose of using screening factors?

85. What is a good indicator of a stock being volatile?

86. Way to quantify the risk of a given security?

87. What happens to an investment if risk is mitigated properly?

88. Objective of a conservative trader's portfolio?

89. Main advantage of a stop loss order?

90. What is meant by a 'leading indicator'?

91. Which one is a risk of trading stocks on a foreign stock exchange as compared to trading it domestically?

92. Why is it important to write down trading goals?

93. Which would not be an example of managing risk?

94. For which reasons are both fundamental and technical analyses criticized?