Stock Investment - Remedial Exam

What does Tesla’s market capitalization of $800 billion suggest, compared to Ford’s $50 billion and GM’s $80 billion, and how might this influence an investor’s mindset toward these companies?

• Investors are likely to ignore market capitalization when making stock decisions.

• The higher market cap means Tesla has lower risk than Ford and GM, making it a safer investment.

• Investors may view Tesla as overvalued and prefer traditional automakers with lower market caps.

• The large gap in market capitalization may lead investors to believe Tesla has stronger growth potential and innovation leadership.

What might a stock investor infer if Company J has a market capitalization of ₱300 billion, while Company S has a market capitalization of only ₱10 billion?

• Company J is less established in the industry than Company S.

• Company S is likely to attract more investor interest due to its smaller size.

• Market capitalization does not reflect investor confidence or company performance.

• Investors may believe Company J has greater growth potential and brand strength.

If Company T’s stock reached a 52-week high of $320, a low of $180, and is currently at $250, how might a stock investor interpret this?

• The stock has been stable and predictable over the past year.

• The stock price is showing a bearish trend with low volatility.

• The stock experienced notable volatility but is trending upward.

• The current price indicates the company is not growing.

If Company J’s 50-day moving average is ₱240 and its 200-day moving average is ₱225, what might a stock investor infer from this pattern?

• This is a bearish signal and suggests selling the stock.

• The 50-day moving average is irrelevant to investment decisions.

• This is a Golden Cross, which could signal a buying opportunity.

• Moving averages are only useful for long-term investments.

If a company's 50-day moving average is greater than its 200-day moving average, this indicates a bullish trend. Considering this (ceteris paribus), what is the most likely investor action?

• Sell the stock immediately to avoid future losses.

• Avoid buying because the market trend is uncertain.

• uy more stocks, expecting the upward trend to continue.

• Wait for the moving averages to converge before making a decision.

Tesla’s moving averages:

• 50-day MA = $240

• 200-day MA = $225
  
  

What investment action does this “Golden Cross” signal?

• Sell Tesla stock — the trend is reversing.

• Hold for now — the market is uncertain.

• Buy Tesla stock — strong bullish trend is emerging.

• Wait for the 50-day MA to drop below the 200-day MA.

How is a moving average (MA) calculated in stock analysis?

• By averaging a company’s total revenue over several years.

• By averaging the stock’s closing prices over a specific number of days.

• By calculating the difference between stock highs and lows in a year.

• By tracking the stock’s dividend payouts monthly.

Suppose Tesla's stock closed at the following prices over 5 days:

Day 1: $240, Day 2: $245, Day 3: $238, Day 4: $242, Day 5: $250

What is the 5-day moving average?

• $238

• $240

• $243

• $245

If the 50-day MA of a stock is higher than the 200-day MA, what does this signal in technical analysis?

• A bearish trend (Death Cross)

• A stable trend with no action needed

• A bullish trend (Golden Cross)

• A declining stock with weak fundamentals

If GreenTech Inc.'s stock reached a 52-week high of $150, a low of $90, and is currently at $140, how might a stock investor interpret this?

• The stock has remained flat and shows no signs of change.

• The stock is recovering from a downturn and showing strong upward momentum.

• The stock is at its lowest point and may not recover soon.

• The current price suggests the company is highly overvalued.