Chapters 11-13 Test

Front

What is the primary goal of investing?

Back

Growing wealth over time

Front

What does a stock represent?

Back

Ownership of a company

Front

Dividends are typically paid to shareholders on what schedule?

Back

Quarterly

Front

What is a market order in stock trading?

Back

A trade executed immediately at the current price.

Front

What is the formula for Earnings Per Share (EPS)?

Back

Profit / Number of outstanding shares

Front

What does a high P/E ratio potentially indicate?

Back

Overvaluation or high growth expectations

Front

A bull market is characterized by: Falling stock prices, Rising stock prices, Stable stock prices, High bond prices

Back

Rising stock prices

Front

What is the purpose of diversification in investing?

Back

To reduce risk by spreading investments

Front

Which type of investment typically has the lowest fees? Options: Mutual funds, Index funds, Actively managed funds, Hedge funds

Back

Index funds

Front

Which account type allows tax-free withdrawals in retirement? Options: Traditional IRA, Roth IRA, 401(k), Individual brokerage account

Back

Roth IRA