Stock Jobs Basics Test 1

Question 1

What causes the daily movement in the stock price?

Accepted Answer

All of the above

Answer

Daily stock price movements are influenced by a combination of factors. News and events, such as company earnings reports, economic data, or geopolitical developments, directly impact investor sentiment and expectations. Ultimately, these factors translate into shifts in the fundamental forces of demand and supply for the stock, which are the immediate drivers of price fluctuations.

Question 2

What is stock's week low?

Accepted Answer

The stock's lowest price in the previous year of trading

Answer

The '52-week low' (often referred to as 'week low' in some contexts) represents the lowest price at which a stock has traded over the past 52 weeks, or one full year. This metric is a common indicator used by investors to understand a stock's historical price range and potential support levels.

Question 3

What does "Holding period" mean in terms of the investment

Accepted Answer

The length of time you've held the investment

Answer

The 'holding period' in investment refers to the total length of time an investor owns a particular asset or security. It begins on the date of purchase and concludes on the date of sale. This duration is crucial for calculating investment returns, determining capital gains or losses, and assessing tax implications.

Question 4

What is the investment return when you purchase a stock today for 125 and sell it at 145 a year from now?

Accepted Answer

16%

Answer

To calculate the investment return, you use the formula: (Selling Price - Purchase Price) / Purchase Price * 100. In this scenario, the calculation is (145 - 125) / 125 * 100. This simplifies to 20 / 125 * 100, which equals 0.16 * 100, resulting in a 16% investment return.

Question 5

When calculating returns over a two-year period, you should choose

Accepted Answer

Compounded annual growth rate (CAGR)

Answer

When calculating returns over a period longer than one year, the Compounded Annual Growth Rate (CAGR) is the most appropriate metric. CAGR provides a smoothed, annualized rate of return, accounting for the compounding effect of returns over multiple years. This gives a more accurate and comparable representation of an investment's performance than a simple absolute return.

Stock Jobs Practice Test

Stock Jobs Practice Test

Stock Jobs Basics Test 1