Stock Advisor Cheat Sheet 2026
The 30 highest-yield Stock Advisor facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.
- You will have losses from time to time in the stock market. → True
- What is 'concentration risk' in a portfolio? → Excessive exposure to a single stock, sector, or geography
- What is a 'penny stock'? → A low-priced, often high-risk stock of a small company
- What should you do if you want to stay in the investing game for the long term? → Maintain your long-term portfolio commitment.
- What does 'fundamental analysis' primarily focus on when evaluating stocks? → A company's financial health, earnings, and intrinsic value
- What is dividend yield? → Annual dividends as a percentage of the share price
- What is a 'mosaic theory' approach to investment research? → Combining only public information sources to build a complete picture of a company
- What is a stock ticker symbol? → A short code identifying a publicly traded company
- What is 'price-to-cash flow' (P/CF) ratio? → A ratio comparing stock price to operating cash flow per share
- What is one reason people may have an unrealistic expectation about the stock market? → They confuse luck with skill.
- A 'market maker' primarily provides which function? → Liquidity by quoting buy and sell prices
- Insider trading is best defined as buying or selling securities based on: → Material, non-public information obtained through a position of trust or confidence
- A 'stop-loss order' is designed to: → Limit losses by selling at a set trigger price
- FINRA (Financial Industry Regulatory Authority) has primary regulatory jurisdiction over: → Broker-dealers and their registered representatives operating in the US
- Insider trading based on material non-public information is best described as: → Illegal and prohibited
- What is 'dollar-cost averaging' (DCA)? → Investing a fixed dollar amount at regular intervals regardless of price
- What is the primary risk disclosed in marketing materials for leveraged investments? → Amplified losses as well as gains
- Which factor most directly affects a bond's price? → Changes in interest rates
- What is volatility in the stock market? → The degree to which prices move up and down
- What does a high P/B (price-to-book) ratio often suggest? → The market expects strong future growth or values intangibles
- Regulation Best Interest (Reg BI), which took effect in June 2020, requires broker-dealers to: → Act in the best interest of retail customers when making investment recommendations
- What is the fiduciary duty owed by a registered investment advisor to clients? → Act in the client's best interest
- What is 'dividend discount model' (DDM) used for? → Valuing a stock based on the present value of expected future dividends
- What is 'diversification' meant to achieve in a portfolio? → Reduce unsystematic risk by spreading investments across different securities
- What is compound growth? → Earning returns on both your principal and prior returns
- What is the main risk of investing in stocks? → The value can decline and you may lose money
- What is 'cornering the market'? → Gaining enough control to manipulate a security's price
- What does 'total return' include in measuring portfolio performance? → Capital gains plus dividends and interest received
- Why is it important to prepare for downturns? → To accept short-term volatility in order to obtain great long-term rewards
- What is 'asset allocation' in portfolio management? → Distributing investments across different asset classes like stocks, bonds, and cash
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