TOPIC 6 STOCK MARKET

Multiple Choice

What is the primary function of the stock market?

• To facilitate buying and selling of stocks

• To provide loans to businesses

• To regulate currency exchange

• To control inflation

Multiple Choice

What is a portfolio?

• A case for carrying loose papers

• A collection of investments owned by an individual or an institution

• A type of mutual fund

• A detailed plan of a company's future investments

Multiple Choice

What does it mean to diversify your investment portfolio?

• To invest all your money in one stock

• To buy stocks only in the technology sector

• To spread your investments across various assets

• To invest in the stock market only

Multiple Choice

According to the risk/reward graph, what is the relationship between risk and potential return?

• Higher risk leads to lower return

• Lower risk leads to higher return

• Higher risk leads to higher potential return

• There is no relationship

Multiple Choice

What does the graph on the right represent regarding EU bond yields?

• The yield of US bonds

• The yield of EU bonds over time

• The yield of corporate bonds

• The yield of government bonds in Asia

Multiple Choice

What are bonds and how do they work?

• They are loans made to companies or governments

• They are a type of stock investment

• They are only available in large denominations

• They are risk-free investments

Open Ended

Stocks have historically had the highest rate of return but also come with the highest risk. Explain why this is the case.

Multiple Choice

What are dividends and how do they benefit shareholders?

• They are a part of the profit given to shareholders

• They are a type of tax on profits

• They are fees paid to stock brokers

• They are penalties for selling stocks

Multiple Choice

What is the formula for calculating the Dividend Payout Ratio?

• Dividend Payout Ratio = Dividends Paid / Net Income

• Dividend Payout Ratio = Net Income / Dividends Paid

• Dividend Payout Ratio = Earnings per Share / Dividends per Share

• Dividend Payout Ratio = Total Dividends / Total Earnings

Multiple Choice

What does Earnings Per Share (EPS) represent?

• The total earnings of the company divided by the number of outstanding shares.

• The dividend paid out to each shareholder.

• The total earnings of the company.

• The price of each share in the stock market.

Multiple Choice

“NET INCOME also known as NET PROFIT” is:

• Profit before you pay taxes and interest

• Profit before you deduct operating expenses

• The money used to pay taxes and health benefits

• Profit left over after all the expenses have been deducted from your total revenue

Multiple Choice

“NET INCOME/NET PROFIT” is:

• Profit before you pay taxes and interest

• Profit before you deduct operating expenses

• The money used to pay taxes and health benefits

• Profit after all the expenses have been deducted from your total revenue

Multiple Choice

What is a Target-date investment fund?

• A type of money market account.

• A mutual fund or ETF that uses your initial investment date to allocate assets.

• A mutual fund or ETF that uses your birthday to change asset allocations.

• A mutual fund or ETF that is professionally managed and uses your retirement date to determine the asset allocation and risk tolerance over time.

Multiple Choice

What are the three types of annuities mentioned in the image?

• Fixed

• Indexed

• Variable

• Mutual

Multiple Choice

What is the recommended net worth allocation for a 35-year-old investor according to the chart?

• 70% Stocks, 0% Bonds, 30% Real Estate

• 35% Stocks, 5% Bonds, 30% Real Estate

• 45% Stocks, 30% Bonds, 25% Real Estate

• 35% Stocks, 10% Bonds, 25% Real Estate

Multiple Choice

What is the difference between being rich and being wealthy?

• Rich is working for your money.

• Wealthy is your money working for you.

• True wealth is owning your own business.

• None of the above.

Multiple Choice

What is net worth?

• Assets minus liabilities

• Liabilities minus assets

• Total assets

• Total liabilities

Multiple Choice

How do you become wealthy?

• Own your own business

• Buy stock

• Invest in real estate

• Save money

Multiple Choice

Who is Red McCombs and what are some of his notable achievements?

• A businessman from Texas

• Owner of sports teams

• Founder of a school

• All of the above

Multiple Choice

What does an entrepreneur’s legacy refer to?

• Leaving their mark on the world

• Controlling business operations

• Developing flexibility

• Taking actions to coordinate a business venture

Multiple Choice

Who is the founder of Wal-Mart?

• Samuel Walton

• Bill Gates

• Jeff Bezos

• Steve Jobs

Multiple Choice

What percentage of Warren Buffet's fortune is represented by Apple Inc. in the pie chart?

• 50.04%

• 25.3%

• 18.6%

• 7.22%

Multiple Choice

How do entrepreneurs such as Bill Gates and Steve Jobs impact the market?

• They only benefit themselves

• They change the way we work, play, communicate, and learn

• They only impact a small number of people

Multiple Choice

What is the estimated fortune of JK Rowling according to Forbes magazine in February 2004?

• $376 million

• $476 million

• $576 million

• $676 million

Multiple Choice

What position did Meg Whitman hold at eBay?

• President

• CEO

• CFO

• COO

Multiple Choice

What achievements and contributions has Oprah Winfrey made in her career?

• Multiple Emmy Awards

• Academy Award nominations

• Ranked richest African American

• All of the above

Multiple Choice

What does the buyer look at?

• Future dividends, future price and how stock performed in the past

• Current market price

• Historical data

• Investor sentiment

Poll

How confident do you feel about this topic now?

• Very confident
• Somewhat confident
• Not confident