Stock Advisor Trainer 3

Question 1

A Stock Advisor trainer warns against 'chasing momentum.' What risk does this describe?

Accepted Answer

Buying after large run-ups and getting caught in a reversal

Answer

Selling too early during a rally

Answer

Holding cash too long

Answer

Diversifying too broadly

Question 2

What is the key difference between fundamental and technical analysis?

Accepted Answer

Fundamental studies business value; technical studies price patterns

Answer

They are identical approaches

Answer

Technical analysis ignores price data

Answer

Fundamental analysis only uses charts

Question 3

A trainee asks about a 'dividend aristocrat.' What defines one?

Accepted Answer

A company that has raised dividends for 25+ consecutive years

Answer

Any stock that pays a dividend

Answer

A stock with the highest yield in its sector

Answer

A company that just started paying dividends

Question 4

Why might a trainer caution against over-relying on past performance?

Accepted Answer

Past returns do not guarantee future results

Answer

Past performance is always repeated

Answer

It is the only reliable indicator

Answer

It removes the need for research

Question 5

What does a high P/B (price-to-book) ratio often suggest?

Accepted Answer

The market expects strong future growth or values intangibles

Answer

The company is bankrupt

Answer

The stock is always undervalued

Answer

Book value is irrelevant

Question 6

A trainer explains 'rebalancing.' What does it involve?

Accepted Answer

Adjusting holdings back to target allocations

Answer

Selling all stocks during a downturn

Answer

Buying only the best performer

Answer

Avoiding any portfolio changes

Question 7

Which factor most directly affects a bond's price?

Accepted Answer

Changes in interest rates

Answer

The company's stock split

Answer

The CEO's salary

Answer

Dividend yield of unrelated stocks