Free Stock Marketing Practices Q&A

How does the stock market allow investors to wager on the future of a company?

By judging the company on its business results and future prospects.

By gambling on the company's stock price.

Setting the company's value based on the price at which investors are willing to buy and sell.

By investing in the company's stock.

Correct! Wrong!

The stock market is a way for investors to ______

Trade stocks for cash, or vice versa.

Gamble on stocks

Correct! Wrong!

As long as you don’t sell your stock, you _____.

Can hold your stock forever

There will be no taxation on the gains.

Will only have to pay taxes on dividends

Will owe tax on the gains

Correct! Wrong!

What does compounding refer to in relation to investing?

The fees charged by stockbrokers when an investor buys or sells shares

The potential for an investment's returns to grow as they are reinvested

When an investor buys and sells the same security within a short period of time

The reinvestment of earnings from a company back into the company

Correct! Wrong!

What is the best advice for avoiding the morale-crushing experience of bumpy results right out of the gate when investing?

Do not invest in companies that are experiencing events.

Invest in thirds only when the market is down.

Invest all of the amount you want to invest at once.

Divide the amount you wish to invest by three, and then buy shares at three different locations.

Correct! Wrong!

What does it mean to "buy the basket"?

Buying a basket of stocks means buying all the stocks in a particular country.

Buying a basket of stocks means buying all the stocks in a particular company.

Purchasing a basket of stocks entails purchasing all of the companies in a specific industry.

Buying a basket of stocks means buying all the stocks in the world.

Correct! Wrong!

Which of the following is NOT a buying strategy that reduces your exposure to price volatility?

Investing a predetermined sum of money at recurring times

Dollar-cost averaging

Investing a lump sum all at once

Investing only when the stock price is low

Correct! Wrong!

FREE Stock Marketing Practices Questions and Answers

How does the stock market allow investors to wager on the future of a company?

The stock market is a way for investors to ______

As long as you don’t sell your stock, you _____.

What does compounding refer to in relation to investing?

What is the best advice for avoiding the morale-crushing experience of bumpy results right out of the gate when investing?

What does it mean to "buy the basket"?

Which of the following is NOT a buying strategy that reduces your exposure to price volatility?

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