Stock Market IQ Test

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

Bonds

Cash

Stocks

Real Estate

None

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

They can be traded at any time

They are both deliberately confusing

They are tied to an index

One investment purchases a group of assets

None

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

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

It measures the volatility of a stock

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

None

4 of 15) What is the Sharpe Ratio Index?

A way to spread out your stock sales

A conservative way to purchase and sell stocks

A measure of risk that helps you select the right stocks

A pen that helps you calculate stock prices

None

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

A company's revenue growth

A company's competition

A company's profit margins

The price at which the stock trades

None

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

They make more money

They are spread too thin

They create high-risk scenarios

They drive their money manager crazy

None

7 of 15) What is implied volatility?

A risk probability equation

Something that only impacts option writers

A measure of how risk could occur

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

None

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

Indicate who is making money and losing money in options

Offer a precise mathematical formula for pricing options

Provide a measure of banking interest rates

Measure overall market sentiment

None

9 of 15) What partially defines a Bull Market?

Lack of investor confidence

Low stock prices

A positive outlook about the current business cycle

Stimulating energy drinks

None

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 have to come up with money if share prices increase

You may receive a margin call order

None

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

Sell the losing stock and hold onto the winning stock

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

Become a deer in the headlights and do nothing

Decide how to proceed based on your gut instincts

None

12 of 15) What are Trailing Stop Orders?

An immediate order to sell a security

An order that comes with a set of conditions

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

None

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

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

A bullish signal about prices.

A pattern that is not often correct

A pattern for identifying stocks that are about to rise

None

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 similarities in two different markets

Price differences across two or more markets for the same investment

None

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

Skip the research

Use a buy and hold strategy

Pay attention to rumors and pure market price indicators

Sell, sell, sell

None

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Stock Market IQ Test

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