Free Stock Marketing Practices Q&A

The stock market is a way for investors to ______

Trade stocks for cash, or vice versa.

Gamble on stocks

Correct! Wrong!

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

Dollar-cost averaging

Investing only when the stock price is low

Investing a lump sum all at once

Investing a predetermined sum of money at recurring times

Correct! Wrong!

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.

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

By gambling on the company's stock price.

By investing in the company's stock.

Correct! Wrong!

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

Will only have to pay taxes on dividends

Can hold your stock forever

Will owe tax on the gains

There will be no taxation on the gains.

Correct! Wrong!

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

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

Do not invest in companies that are experiencing events.

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

Invest in thirds only when the market is down.

Correct! Wrong!

What does compounding refer to in relation to investing?

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 fees charged by stockbrokers when an investor buys or sells shares

The reinvestment of earnings from a company back into the company

Correct! Wrong!

What does it mean to "buy the basket"?

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

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 a particular company.

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

Correct! Wrong!

FREE Stock Marketing Practices Questions and Answers

The stock market is a way for investors to ______

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

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

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

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

What does compounding refer to in relation to investing?

What does it mean to "buy the basket"?

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