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Basic Stock Trading MCQ

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

Both players confess

One player denies and one player confesses

Both players deny

There is no unique equilibrium

Answer

Correct Answer: Both players deny

Note: This Question is unanswered, help us to find answer for this one

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

The dividend payout ratio is optimal

The sum of the stock's expected capital gain and dividend yield is equal to the stock's required rate of return

The stock's required return is equal to the growth rate in earnings and dividends

The present value of growth opportunities is equal to the value of assets in place

Answer

Correct Answer: The sum of the stock's expected capital gain and dividend yield is equal to the stock's required rate of return

Note: This Question is unanswered, help us to find answer for this one

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

Fundamental Analysis

Technical Analysis

Index Management

None

Answer

Correct Answer: Technical Analysis

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

All security price and volume data

All publicly available information

All information, including inside information

All costless information

Answer

Correct Answer: All publicly available information

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5. What does a primary trend typically do?

It leads to short term fluctuations in prices.

It allows traders to swing trade in either direction.

It changes the direction of the market every month.

t continues for over a year and has mass support.

Answer

Correct Answer: t continues for over a year and has mass support.

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6. Which of the following would not be a stock trading goal?

Achieving 10% return on the invested capital within one month

Always making money

Earning $1,000 per month from trading

Limiting oneself to a maximum of 10 transactions a month

Answer

Correct Answer: Always making money

Note: This Question is unanswered, help us to find answer for this one

7. Why do goals have to be specific?

In order to tell others

In order to be achievable and measurable

In order to get something done

In order to be able to change them

Answer

Correct Answer: In order to be achievable and measurable

Note: This Question is unanswered, help us to find answer for this one

8. What is the term used for selling a stock without owning the stock?

Short Selling

Margin Selling

Fundamental Selling

Technical Selling

Answer

Correct Answer: Short Selling

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9. What is the purpose of setting trading goals?

To meet the requirements set by the SEC

To minimize taxes

To have a measurable and achievable target

To guarantee success

Answer

Correct Answer: To have a measurable and achievable target

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10. Which of the following is an assumption made by a technical analyst?

The stock price does not reflect market information currently.

No one else has recognized the stock as a good investment.

All stocks will increase in the long run.

The stock price already reflects all news and news events and they do not impact a stock's price.

Answer

Correct Answer: The stock price already reflects all news and news events and they do not impact a stock's price.

Note: This Question is unanswered, help us to find answer for this one

11. What is meant by "diversification"?

Buying as much of one stock as possible

Buying only speculative stocks

Purchasing stocks from varying industries to reduce overall risk

Purchasing options contracts

Answer

Correct Answer: Purchasing stocks from varying industries to reduce overall risk

Note: This Question is unanswered, help us to find answer for this one

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

Because it is required by law

Because it helps in tax planning

Because it helps them decide which industry to invest in

Because they can then match their risk tolerance level to the types of stocks they are purchasing

Answer

Correct Answer: Because they can then match their risk tolerance level to the types of stocks they are purchasing

Note: This Question is unanswered, help us to find answer for this one

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

Buying and selling stock on the same day

Contract for the stock symbol

An order which is only good for the current day, and expires if not executed at the end of the day

An order that is open indefinitely

Answer

Correct Answer: An order which is only good for the current day, and expires if not executed at the end of the day

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14. Which of the following is a way for a trader to track their progress towards their goals?

Just keeping it in the back of their minds

Changing their goals to what they have already achieved

Creating reports and charts which map their progress alongside with the goal

Not bothering about setting goals

Answer

Correct Answer: Creating reports and charts which map their progress alongside with the goal

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15. Which of the following would be an indication of market decline?

Increase in crime

Increase in jobs available

Decrease in crime

Increase in auto sales

Answer

Correct Answer: Increase in crime

Note: This Question is unanswered, help us to find answer for this one

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

Buy a stock when employee morale is low, sell it when it is high

Invest in bonds when stock prices are high

Purchase a stock when interest rates are low, sell when they are high

Purchase a stock when it is at a discounted price, sell it once it has gained value in the market

Answer

Correct Answer: Purchase a stock when it is at a discounted price, sell it once it has gained value in the market

Note: This Question is unanswered, help us to find answer for this one

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

Because he has too much time to manage them

Because they have completely different investment perspectives

Because taxes would be excessive if he does not do it

Because it is too difficult to earn a high return on any one portfolio

Answer

Correct Answer: Because they have completely different investment perspectives

Note: This Question is unanswered, help us to find answer for this one

18. What is the difference between a stock trader and a stock investor?

There is no difference. Both terms refer to people who invest in stocks.

Stock traders are the same as stock brokers but stock investors are not.

Stock traders profit on short term price changes, stock investors profit on long term growth.

A stock investor invests only in blue chip stocks, a stock trader only in risky stocks.

Answer

Correct Answer: Stock traders profit on short term price changes, stock investors profit on long term growth.

Note: This Question is unanswered, help us to find answer for this one

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

Growth stage

Decline

Peak

Idea stage

Answer

Correct Answer: Idea stage

Note: This Question is unanswered, help us to find answer for this one

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

A market crash

A market correction

A market magnitude

A market normalization

Answer

Correct Answer: A market correction

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21. Which type of analysis relies on charting?

Fundamental

Technical

Both Fundamental and Technical

Neither Fundamental nor Technical

Answer

Correct Answer: Technical

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22. What is the primary method to mitigate risk?

Diversifying investment holdings

Day trading

Purchasing only tech stocks

Purchasing stock in the company you work for

Answer

Correct Answer: Diversifying investment holdings

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

They have a longer time horizon to allow for the risky investments to increase over time, and are immune to the short term changes.

They do not know the value of money in the long run.

They have less knowledge and do not know the potential for loss.

There are short term gains to be made.

Answer

Correct Answer: They have a longer time horizon to allow for the risky investments to increase over time, and are immune to the short term changes.

Note: This Question is unanswered, help us to find answer for this one

24. What type of transaction is a limit order?

A buy order

A sell order

Can be either

Is neither

Answer

Correct Answer: Can be either

Note: This Question is unanswered, help us to find answer for this one

25. What is the most important principle to be followed in goal setting?

Set goals far beyond your reach as motivation

Don't set too many goals

Set goals but then don't worry about them

Set realistic and achievable goals

Answer

Correct Answer: Set realistic and achievable goals

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26. What is "capitalization"?

The value of a company based on the number of shares outstanding and the stock price

The amount of capital the founders have placed in the company

The amount of debt the company holds

The retained earnings value of the company

Answer

Correct Answer: The value of a company based on the number of shares outstanding and the stock price

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

It has no impact.

It makes the market move in an upward direction.

It leads to an increase in taxation.

It dictates which way the market will run.

Answer

Correct Answer: It dictates which way the market will run.

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28. How is risk measured?

It is measured by classifying risk into one of the three levels of risk.

Individually; each investor assesses their own risk tolerance level.

As a letter: a,b,c or d

Someone else assesses your risk level.

Answer

Correct Answer: Individually; each investor assesses their own risk tolerance level.

Note: This Question is unanswered, help us to find answer for this one

29. What is the relationship between fundamental and technical analyses?

They are mutually exclusive, and an analyst would use one or the other, never both.

They must both be used together.

They can both be used to complement each other, but cannot be used together.

They are very exclusive techniques that should both be avoided.

Answer

Correct Answer: They can both be used to complement each other, but cannot be used together.

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30. What does the acronym "OTCBB" stand for?

On the Counter Buying Board

On the Courier Bulletin Board

Over the Counter Bulletin Board

Other Time Counting Buying Board

Answer

Correct Answer: Over the Counter Bulletin Board

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31. What is a secular trend?

A near term trend

A predicted trend in the future

A past trend

A long term trend

Answer

Correct Answer: A long term trend

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32. What would credit risk be used to assess?

The management's personal credit score

The company's ability to pay its long term debts

The correctness of a technical analysis

A business's ability to acquire debt capital

Answer

Correct Answer: A business's ability to acquire debt capital

Note: This Question is unanswered, help us to find answer for this one

33. In a bear market, what is a short term rally referred to as?

Bear Market Rally

Bull Market Rally

Bull Market

Bear Market

Answer

Correct Answer: Bear Market Rally

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

The date a stock is initially sold

The date of the financial report release

The date the fiscal year ends

The date a dividend is declared

Answer

Correct Answer: The date a dividend is declared

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

Because the new year means companies can restart and forget the past

Because the management is always more driven

Because the year end sales typically bolster profits and increase demand

Because employee cuts are made reducing expenses typically after the holidays

Answer

Correct Answer: Because the year end sales typically bolster profits and increase demand

Note: This Question is unanswered, help us to find answer for this one

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

Market mechanics

Market normalization

Stock market magnitude

Stock market crash

Answer

Correct Answer: Stock market crash

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

A market statistic which indicates what changes will typically take place after changes in the stock market

A report put out by the stock exchange

One stock price dictating the price of another stock

Insider information

Answer

Correct Answer: A market statistic which indicates what changes will typically take place after changes in the stock market

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38. What is the ideal number of portfolios for an experienced trader?

100

Answer

Correct Answer: 5

Note: This Question is unanswered, help us to find answer for this one

39. Why would a stock trader want to create various portfolios?

So that each portfolio may be taxed separately

So that each portfolio may contain one stock

So that each portfolio may be set up to meet specific goals

So that they may be able to sell all the stocks within a portfolio more easily

Answer

Correct Answer: So that each portfolio may be set up to meet specific goals

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

A buy order

A sell order

Can be either

Is neither

Answer

Correct Answer: A sell order

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41.
What would be the appropriate order to place in the following example?
An investor owns a stock currently trading at $20. They purchased it at $10. They want to ensure they have at least an 80% return.

Place a stop loss at $18

Place a sell limit order at $16

Place a buy limit order at $10

Place a buy limit order at $22

Answer

Correct Answer:

Place a stop loss at $18

Note: This Question is unanswered, help us to find answer for this one

42. What is the primary theory behind fundamental analysis?

All stocks rise in price eventually.

Profits can be made in the near term by purchasing mispriced securities.

Interest rates are the primary indicator of stock prices.

The management needs direction.

Answer

Correct Answer: Profits can be made in the near term by purchasing mispriced securities.

Note: This Question is unanswered, help us to find answer for this one

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

It lowers the trader's tax obligations.

It makes it easier for the trader to trade and profit.

It eliminates all risk.

Goals can be set for each portfolio and tracked separately.

Answer

Correct Answer: Goals can be set for each portfolio and tracked separately.

Note: This Question is unanswered, help us to find answer for this one

44. Which of the following would most likely be a way to classify various portfolios?

By the tax laws which apply

By the number of shares outstanding

By the time the securities were purchased

By the time horizon of the investments contained in it

Answer

Correct Answer: By the time horizon of the investments contained in it

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

Selling a call option and purchasing a put option

Purchasing two call options at different prices

Owning both call and put stock options at the same stock price

Purchasing two put options at different prices

Answer

Correct Answer: Owning both call and put stock options at the same stock price

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46. What is the duration of a market cycle?

One year

Depends on the product, market, economic situation, and cannot be stated

Limited to 10 years at the most

Typically two years

Answer

Correct Answer: Depends on the product, market, economic situation, and cannot be stated

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47. What is meant by "day trading"?

Trading during market hours

Trading stocks on foreign markets

Purchasing stocks and selling them on the same day

Holding stocks for a short period of time, not more than a week

Answer

Correct Answer: Purchasing stocks and selling them on the same day

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48. What is a "speculative stock"?

A stock which has a proven track record for slow growth

A stock which is high risk and has the potential for large returns or large losses

A stock with a guaranteed return

A stock which trades on the NASD

Answer

Correct Answer: A stock which is high risk and has the potential for large returns or large losses

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

Selling off the division

Reworking the product or offering an additional product, as the current product is likely to start declining

Spending on marketing to increase sales

Hiring additional staff

Answer

Correct Answer: Reworking the product or offering an additional product, as the current product is likely to start declining

Note: This Question is unanswered, help us to find answer for this one

50. Which of the following would be a good example of risk mitigation?

Purchasing only small cap stocks

Purchasing stocks in three industries

Purchasing stocks all in one industry

Purchasing only blue chip stocks

Answer

Correct Answer: Purchasing stocks in three industries

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51. When is the straddle trading strategy appropriate?

When the price may move by a small amount

When an investor believes there will be a large decrease in stock prices

When an investor believes there will be a large increase in stock prices

When an investor believes there will be a large stock price movement, but does not know in which direction

Answer

Correct Answer: When an investor believes there will be a large stock price movement, but does not know in which direction

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

Fundamental Analysis

Technical Analysis

Capital Asset Pricing Model

All of the above

Answer

Correct Answer: Fundamental Analysis

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53. What is the purpose of a stop loss order?

To set a purchase price on a stock

To write an option contract at the trigger price

To sell a stock at the purchase price before losing money

To protect profits already made on a stock investment

Answer

Correct Answer: To protect profits already made on a stock investment

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

The order converts to a market order to sell.

The seller is notified to log into their account to execute the order.

The stock is purchased.

An options contract is sold for the security at the trigger price.

Answer

Correct Answer: The order converts to a market order to sell.

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

By setting limit and stop loss orders on all transactions using those criteria

By actively watching the stocks and try to judge when to sell

BY using it as a loose guideline

By asking their friends to keep them on track

Answer

Correct Answer: By setting limit and stop loss orders on all transactions using those criteria

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

Growth

Idea stage

Decline

Rapid recession

Answer

Correct Answer: Rapid recession

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

Growth

Idea stage

Decline

Peak

Answer

Correct Answer: Growth

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58. What is meant by "technical analysis"?

An analysis which uses fundamental information about a company

An analysis which is done on a stock after it is purchased

An analysis technique which utilizes both qualitative and quantitative factors

A stock price analysis technique using technical aspects of a stock

Answer

Correct Answer: A stock price analysis technique using technical aspects of a stock

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59. What is portfolio management?

Having a suite of investments to reach a goal while minimizing risk

Buying shares all in one industry

Actively trading stocks in your portfolio

Selling securities which are not performing

Answer

Correct Answer: Having a suite of investments to reach a goal while minimizing risk

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60. Why would a trader liquidate a portfolio?

Because it is illegal to hold it too long

To avoid being labeled as a day trader

Because it has made too much money already

Because he is no longer interested in the classification of stock

Answer

Correct Answer: Because he is no longer interested in the classification of stock

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61. What is the primary goal of technical analysis?

Identifying trends to predict short term price movements

Helping build a retirement plan

Identifying stocks with potential for large increases in the next two years

Finding indications of interest rate direction

Answer

Correct Answer: Identifying trends to predict short term price movements

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

Because they want to pay more than the current price

Because they want to sell the stock in the future

Because they want to purchase a certain stock at a price lower than its current price without constantly monitoring the stock price

Because they want to limit their market risk

Answer

Correct Answer: Because they want to purchase a certain stock at a price lower than its current price without constantly monitoring the stock price

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63. What factors does technical analysis primarily rely on?

Financial reports

Management reports

Past Price and volume

Market indicators

Answer

Correct Answer: Past Price and volume

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

Because companies are required by law to report the stage

Because it helps decide whether to hire or fire employees

Because it indicates what the potential growth/decline rate is going to be in the near term

It is not important at all.

Answer

Correct Answer: Because it indicates what the potential growth/decline rate is going to be in the near term

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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.

$18

$20

$22

$17

Answer

Correct Answer: $18

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66. What are the obstacles to achieving stock trading goals?

The stock market itself

Inability to trade on foreign exchanges

A career as a stock broker

People or things which will require the trader to maneuver around them to reach their goals

Answer

Correct Answer: People or things which will require the trader to maneuver around them to reach their goals

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67. What would be the risk tolerance level of a retired government worker in general?

High

Moderate

Varies indefinitely

Low

Answer

Correct Answer: Low

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

A stock order to purchase a stock at a specific price

An order to purchase a stock after it has lost a percentage

An order placed at a price lower than the current price to liquidate a stock and maintain a profit

An order to purchase a stock at a specific price

Answer

Correct Answer: An order placed at a price lower than the current price to liquidate a stock and maintain a profit

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69. Why should goals be changeable?

They should not be; they should be set only once.

Because it allows people never to have to achieve them

Lest you should forget your goals.

So that you may be able to refine your goals on the basis of the progress you are making

Answer

Correct Answer: Because it allows people never to have to achieve them

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

Sell off all stock in the worst portfolio.

Switch the portfolios around so they all have the same return.

Depends on the goals of each portfolio; they could still all be meeting expectations.

Do extensive analysis on the stocks.

Answer

Correct Answer: Depends on the goals of each portfolio; they could still all be meeting expectations.

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

They offer no help in trading stocks.

By indicating when to invest in bonds

By recognizing the declines in the market when stocks can be purchased at a lower price

By letting an investor know when to sell their IBM stock

Answer

Correct Answer: By recognizing the declines in the market when stocks can be purchased at a lower price

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

Stock prices will decrease in general.

Stock prices will increase in general.

There will be no effect on stock prices at all.

Drastic changes in stock prices will be witnessed but it is not possible to determine in which direction.

Answer

Correct Answer: Stock prices will increase in general.

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

Because they cost money

Because of the belief that they do not work, and are a wasted effort

Because not enough data available

Because they are only for the wealthy

Answer

Correct Answer: Because of the belief that they do not work, and are a wasted effort

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74. Which of the following would be a stock trading goal?

Making lots of money

Earning 20% return on the invested capital within 1 year

Trading only in bear markets

Selling call options

Answer

Correct Answer: Earning 20% return on the invested capital within 1 year

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75. What is a "trailing stop" order?

An order in which an investor actively changes the stop loss price of the order based on current market prices

A multi tiered stop loss order

A stop order placed after the purchase of the underlying stock

A stop order placed before buying the underlying stock

Answer

Correct Answer: An order in which an investor actively changes the stop loss price of the order based on current market prices

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

Buying mutual funds

Buying certificates of deposit

Investing in large blue chip stocks for the dividends

Day trading

Answer

Correct Answer: Day trading

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

Because it creates an income stream

Because it is a low risk investment

Because it creates a return on investment

All of the above

Answer

Correct Answer: All of the above

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

Technical Analysis

Valuation

Break Even Analysis

Fundamental Analysis

Answer

Correct Answer: Fundamental Analysis

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79. What is another name for a market cycle?

Market Nomination

Economic Cycle

Gap Cycle

Straddle

Answer

Correct Answer: Economic Cycle

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

A stock account with a guaranteed margin return

A type of stock which sells at a discount

A type of account that can only trade options

A type of stock trading account which essentially borrows money from the stock brokerage to purchase stocks

Answer

Correct Answer: A type of stock trading account which essentially borrows money from the stock brokerage to purchase stocks

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

Daily

Continuously, but not daily

Yearly

Never

Answer

Correct Answer: Continuously, but not daily

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82. What is the "gap" trading strategy?

Trading a stock when its opening price is different from the previous day's closing price

Trading stock in the company GAP

Looking for consistent companies who return large dividends

Buying and selling the same stock at different prices at the same moment

Answer

Correct Answer: Trading a stock when its opening price is different from the previous day's closing price

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83. Which of the following would a fundamental analyst examine?

Managerial reviews

Financial forecasts

Company strategy plans

Company financial statements

Answer

Correct Answer: Company financial statements

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84. What is the purpose of using screening factors?

They help focus on a specific industry.

They guarantee against any losses.

They help investors decide when to exit an investment.

They are preset criteria that any investment must meet before an investor will consider it a viable investment.

Answer

Correct Answer: They are preset criteria that any investment must meet before an investor will consider it a viable investment.

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

The stock price has highs of $50 and lows of $35 in the previous year.

The graph of the stock indicates it hits new highs and lows almost monthly.

The management is not qualified.

The stock does not declare dividends.

Answer

Correct Answer: The graph of the stock indicates it hits new highs and lows almost monthly.

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86. Which of the following is a way to quantify the risk of a given security?

Looking at what peers think of the stock

Using technical analysis

Using fundamental analysis

Calculating the probability and magnitude of potential loss

Answer

Correct Answer: Calculating the probability and magnitude of potential loss

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

Nothing specific happens to any one investment; risk mitigation is an overall portfolio tool.

The stocks you purchase are guaranteed to increase.

It makes for a zero sum game, with no losses or profits.

Risk is assigned to someone else.

Answer

Correct Answer: Nothing specific happens to any one investment; risk mitigation is an overall portfolio tool.

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88. What would be the objective of a conservative trader's portfolio?

Short selling stocks

Long term returns over time

Risky trading

Short term returns

Answer

Correct Answer: Long term returns over time

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89. What is the main advantage of a stop loss order?

It limits all risk.

It protects the investor's profit without his having to monitor the stock price constantly.

It limits an investor's profit.

It creates opportunities for a straddle.

Answer

Correct Answer: It protects the investor's profit without his having to monitor the stock price constantly.

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

A market statistic which changes after a change in stock prices

A report put out by the stock market

Insider information

A market statistic which typically indicates ahead of time what the market will do

Answer

Correct Answer: A market statistic which typically indicates ahead of time what the market will do

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

Growth rate risk

Taxation risk

Legal risk

Exchange rate risk

Answer

Correct Answer: Exchange rate risk

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

So that they may become more real and not be forgotten

So that you may be able to throw them out if you are unable to meet them

So that you may be able to tell people you are a successful trader because you set goals

So that you may be able to ensure success

Answer

Correct Answer: So that they may become more real and not be forgotten

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

Investing completely in a new biotech firm

Diversifying an investment to ten different companies

Purchasing three mutual funds

Buying both stocks and bonds

Answer

Correct Answer: Investing completely in a new biotech firm

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

Because neither can accurately predict future stock price movements

Because it is difficult to decide which one will help a person make more money

Because the numbers needed are not readily available

Because there are other strategies which work better

Answer

Correct Answer: Because the numbers needed are not readily available

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Stock Trading MCQs | Topic-wise

MCQ on Basic Stock Trading

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Basic Stock Trading MCQ

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 of the following would not be a stock trading goal?

7. Why do goals have to be specific?

8. What is the term used for selling a stock without owning the stock?

9. What is the purpose of setting trading goals?

10. Which of the following 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. Which of the following is a way for a trader to track their progress towards their goals?

15. Which of the following would be 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. What is the 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 type of analysis relies on charting?

22. What is the primary method to mitigate risk?

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

24. What type of transaction is a limit order?

25. What is the 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. What is the relationship between fundamental and technical analyses?

30. What does the acronym "OTCBB" stand for?

31. What is a secular trend?

32. What would credit risk be used to assess?

33. In a bear market, what is a 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. What is the ideal number of portfolios for an experienced trader?

39. Why would a stock trader want to create various portfolios?

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

41. What would be the appropriate order to place in the following example?An investor owns a stock currently trading at $20. They purchased it at $10. They want to ensure they have at least an 80% return.

42. What is the primary theory behind fundamental analysis?

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

44. Which of the following would most likely be a way to classify various portfolios?

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

46. What is the 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. Which of the following would be a 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. What is the 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 of the following 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. What is the 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. What are the obstacles to achieving stock trading goals?

67. What would be 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 of the following 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. What is another name for a market cycle?

41.
What would be the appropriate order to place in the following example?
An investor owns a stock currently trading at $20. They purchased it at $10. They want to ensure they have at least an 80% return.