Investment MCQ Flashcards
7 cards from real Investment practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Investment MCQ flashcards as text
What does a high dividend yield indicate relative to share price?
Answer: Large dividend per dollar invested
Dividend yield is the annual dividend divided by share price, so a high yield means more dividend per dollar invested.
An ETF differs from a mutual fund mainly because it:
Answer: Trades on an exchange throughout the day
ETFs trade on exchanges like stocks throughout the day, unlike mutual funds priced once daily.
Capital gains are realized when an investor:
Answer: Sells an asset for more than its cost
A capital gain is realized when an asset is sold for more than its purchase price.
Inflation erodes the value of investments by:
Answer: Reducing real returns
Inflation reduces purchasing power, lowering the real (inflation-adjusted) return on investments.
What is the primary goal of a stop-loss order?
Answer: Limit potential losses on a position
A stop-loss order automatically sells a security at a set price to limit losses.
Market capitalization is calculated as:
Answer: Share price times shares outstanding
Market capitalization equals the share price multiplied by the number of outstanding shares.
A preferred stock generally offers:
Answer: Fixed dividends and priority over common stock
Preferred stock pays fixed dividends and ranks ahead of common stock for dividends and asset claims.