Stock Advisor For Beginners 2

Question 1

What does it mean to own a share of stock?

Accepted Answer

You own a small fractional piece of the company

Answer

A share represents partial ownership (equity) in a company.

Question 2

What is a dividend?

Accepted Answer

A portion of profits paid to shareholders

Answer

Dividends are payments companies distribute to shareholders from earnings.

Question 3

Which type of account is commonly used to buy stocks?

Accepted Answer

A brokerage account

Answer

Stocks are bought and held through a brokerage account.

Question 4

What is a stock ticker symbol?

Accepted Answer

A short code identifying a publicly traded company

Answer

Ticker symbols are abbreviations used to identify stocks on exchanges.

Question 5

What is diversification?

Accepted Answer

Spreading investments across many assets to reduce risk

Answer

Diversification lowers risk by avoiding overexposure to a single investment.

Stock Advisor Practice Test