Stock Marketing Practices - Practice Test Geeks

When an investor buys and sells the same security within a short period of time

The potential for an investment's returns to grow as they are reinvested

The fees charged by stockbrokers when an investor buys or sells shares

The reinvestment of earnings from a company back into the company

Correct! Wrong!

Setting the company's value based on the price at which investors are willing to buy and sell.

By judging the company on its business results and future prospects.

By gambling on the company's stock price.

By investing in the company's stock.

Correct! Wrong!

Trade stocks for cash, or vice versa.

Gamble on stocks

Correct! Wrong!

Will only have to pay taxes on dividends

Can hold your stock forever

Will owe tax on the gains

There will be no taxation on the gains.

Correct! Wrong!

Investing a lump sum all at once

Investing only when the stock price is low

Investing a predetermined sum of money at recurring times

Dollar-cost averaging

Correct! Wrong!

Purchasing a basket of stocks entails purchasing all of the companies in a specific industry.

Buying a basket of stocks means buying all the stocks in a particular company.

Buying a basket of stocks means buying all the stocks in the world.

Buying a basket of stocks means buying all the stocks in a particular country.

Correct! Wrong!

Do not invest in companies that are experiencing events.

Invest in thirds only when the market is down.

Invest all of the amount you want to invest at once.

Divide the amount you wish to invest by three, and then buy shares at three different locations.

Correct! Wrong!