Stock Market IQ Test - Investing 101

Do you have what it takes to successfully manage your own portfolio?

Take our FREE Stock Market IQ test and find out.

The higher your Stock Market IQ, the greater your chances of creating wealth through investment.

This is brought to you by the creators of Investing101, where you can learn stock trading and practice investing 100% risk free.

1 of 15) Which of the four investments has shown the highest returns historically?

Cash

Bonds

Real Estate

Stocks

2 of 15) Which feature do Exchange-Trade Funds (ETFs) have in common with mutual funds?

They can be traded at any time

One investment purchases a group of assets

They are tied to an index

They are both deliberately confusing

3 of 15) How is the term Beta used to understand stock data?

It measures the change in stock price compared to yesterday's closing price

It indicates the total shares outstanding multiplied by the current stock price

It measures the volatility of a stock

It is a test to see if a stock will sell in the stock market

4 of 15) What is the Sharpe Ratio Index?

A pen that helps you calculate stock prices

A way to spread out your stock sales

A measure of risk that helps you select the right stocks

A conservative way to purchase and sell stocks

5 of 15) What does technical analysis look at for investment purposes?

The price at which the stock trades

A company's profit margins

A company's competition

A company's revenue growth

6 of 15) What happens when an investor over-diversifies?

They drive their money manager crazy

They make more money

They are spread too thin

They create high-risk scenarios

7 of 15) What is implied volatility?

A risk probability equation

A calculation that compares the current market price and theoretical future value

Something that only impacts option writers

A measure of how risk could occur

8 of 15) What does the put versus call interest do?

Measure overall market sentiment

Indicate who is making money and losing money in options

Provide a measure of banking interest rates

Offer a precise mathematical formula for pricing options

9 of 15) What partially defines a Bull Market?

Stimulating energy drinks

Low stock prices

A positive outlook about the current business cycle

Lack of investor confidence

10 of 15) What are the dangers in choosing a short selling strategy?

The bank holding your mortgage may not agree

You may end up with very high losses

You may receive a margin call order.

11 of 15) What is the best course of action when faced with two stocks, one gaining value, the other losing value?

Become a deer in the headlights and do nothing

Decide how to proceed based on your gut instincts

Sell the winning stock, take the profit, and wait for the losing stock to regain its value

Sell the losing stock and hold onto the winning stock

12 of 15) What are Trailing Stop Orders?

An order that sets a distance between the market price and a stop order

An order that falls behind the actions on the stock market

An order that comes with a set of conditions

An immediate order to sell a security

13 of 15) What is a Head and Shoulders pattern?

A pattern for identifying stocks that are about to rise

A bearish signal that prices will fall after the pattern formation is done

A pattern that is not often correct

A bullish signal about prices.

14 of 15) What does arbitrage involve?

A strategy that is risky and may not result in any profit

Trading one stock for another very quickly

Price differences across two or more markets for the same investment

Price similarities in two different markets

15 of 15) What can be learned from Warren Buffet's approach to investing?

Sell, sell, sell

Skip the research

Pay attention to rumors and pure market price indicators

Use a buy and hold strategy

Please enter your email address below and click "Submit" to get you Quiz results.