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WorksheetsAlternative Investments Test Review: Short Selling, Crypto, NFT
Total questions: 48
Worksheet time: 24mins
What is the largest cryptocurrency in terms of market cap?
Ethereum
Litecoin
Bitcoin
Ripple
What is a blockchain?
A type of cryptocurrency
A digital ledger for recording transactions
A physical wallet for storing coins
A government regulation
What is the primary function of a cryptocurrency?
To act as a physical currency
To regulate the generation of units and verify fund transfers
To store physical assets
To provide government loans
What is a cryptocurrency wallet used for?
Storing public and private keys for transactions
Exchanging fiat money
Mining new coins
Regulating market prices
What is a digital exchange?
A physical marketplace for trading goods
A platform for trading cryptocurrencies and digital currencies
A government agency for regulating currencies
A type of cryptocurrency
What is the main characteristic of decentralized finance (DeFi)?
Involvement of banks and governments
Conducting financial activities without intermediaries
Use of physical currency
Centralized control by a single entity
Which term describes a business that allows trading of cryptocurrencies for other assets?
Crypto Coin
Digital Exchange
Cryptocurrency Wallet
Blockchain
Which of the following is a digital currency?
Cryptocurrency
Fiat Money
Gold
Silver
What is the purpose of a crypto token?
To act as a physical currency
To interact with applications on a blockchain
To replace government-issued money
To store physical assets
What is the process of validating a cryptocurrency transaction and adding it to the blockchain called?
Speculation
Smart Contract
Mining
Fiat money
What is a self-executing contract with terms directly written into code called?
Fiat money
Proof of Work
Smart Contract
Speculation
What is the main goal of miners in the Proof of Work process?
To lose their stake
To solve a complex math puzzle first
To create fiat money
To write smart contracts
Which process awards cryptocurrency to the miner who staked the most of their existing crypto?
Proof of Work
Proof of Stake
Mining
Speculation
What is the primary purpose of a smart contract?
To validate transactions
To execute agreements automatically
To mine cryptocurrency
To create fiat money
What is the competitive process of validating a cryptocurrency transaction called?
Speculation
Mining
Proof of Stake
Fiat money
What is the advantage of using Bitcoin for international transactions?
Lower fees and faster processing
Higher security and privacy
No need for currency exchange
Ability to bypass government regulations
What is the maximum number of Bitcoins that can ever be created?
Unlimited
100 million
21 million
1 billion
What is a 'cold wallet'?
A government-issued digital wallet
A wallet that relies on offline electronic devices
A type of cryptocurrency exchange
A wallet that uses online software to store private keys
Which cryptocurrency was created as a meme-inspired currency?
Litecoin
Ethereum
Bitcoin
Dogecoin
What does it mean to short a stock?
Buying a stock with the hope it will increase in value
Holding a stock for the long-term
Selling a borrowed stock with the expectation that its price will fall
Investing in multiple stocks for diversification
How do investors make money from shorting a stock?
By buying low and selling high
By borrowing the stock and selling it, then repurchasing at a lower price
By earning dividends
By holding the stock for many years
What is one risk associated with shorting a stock?
Limited dividend payments
Potentially unlimited losses
Lower transaction fees
Guaranteed profits
What does it mean when shorting occurs 'on margin'?
It is done secretly
It requires a special brokerage account
It is done using debt
It involves no risk
What is a short squeeze?
A rapid drop in stock price
A situation where no shares are available for short sellers to buy
A government restriction on shorting stocks
A tax benefit for short sellers
Who lends the shares for shorting?
The government
Stockbrokers
Banks
Individual investors
What does "covering a short" mean?
Selling additional shares
Repurchasing borrowed shares to return them to the lender
Holding shares for a longer period
Buying shares at a higher price
What is a margin call?
A request to sell more shares
A demand from a broker to deposit more money or securities
A notification of dividend payment
A request to buy more shares
What is an NFT (non-fungible token)?
An NFT is a paper asset that represents real-world objects like art, music, in-game items and videos.
An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos.
An NFT is an imaginary asset that represents real-world objects like art, music, in-game items and videos.
An NFT is a fake asset that represents real-world objects like art, music, in-game items and videos.
What is a Cold Wallet?
This refers to a virtual currency wallet that is accessible online, and it facilitates cryptocurrency transactions between the owner and end-users
This is a physical device that keeps your crypto assets (e.g., cryptocurrency, NFTs) completely offline
This is a peer-to-peer marketplaces where cryptocurrency traders make transactions directly without handing over management of their funds to an intermediary or custodian.
This is where you store your secret pass phrase
What is a Hot Wallet?
This refers to a virtual currency wallet that is accessible online, and it facilitates cryptocurrency transactions between the owner and end-users
This is a physical device that keeps your crypto assets (e.g., cryptocurrency, NFTs) completely offline
This is a peer-to-peer marketplaces where cryptocurrency traders make transactions directly without handing over management of their funds to an intermediary or custodian.
This is where you store your secret pass phrase
A Non-Fungible Token (NFT) can represent ownership of a video clip of a basketball game.
True
False
Which crypto asset is the oldest?
Tether
Bitcoin
Dogecoin
Ether
What is the primary benefit of using a decentralized exchange?
Faster transaction speeds
Increased privacy and control over funds
Lower transaction fees
Government oversight
Which of the following is a characteristic of a hot wallet?
It is immune to hacking
It is used for long-term storage
It is a physical device
It is always connected to the internet
What does NFT stand for?
Non-Transferable Token
Non-Fungible Token
Non-Financial Token
Non-Functional Token
What makes NFTs "non-fungible"?
They cannot be bought or sold
They are unique and cannot be replaced by something identical
They are interchangeable like currency
They do not have any value
On which technology are NFTs primarily built?
Cloud Computing
Blockchain
Artificial Intelligence
Internet of Things
Which blockchain is most commonly associated with NFTs?
Bitcoin
Ethereum
Solana
Ripple
What is a key characteristic of NFTs?
They can be physically touched
They are divisible
They represent ownership of a unique digital asset
They are the same as cryptocurrencies
What type of assets can NFTs represent?
Digital art and collectibles
Real estate
In-game items and music
All of the above
How does ownership of an NFT work?
The owner controls the physical item the NFT represents
The owner owns the unique token stored on the blockchain
The owner gets full copyright to the digital asset
The owner can duplicate the NFT for free
What is one advantage of NFTs for artists?
NFTs are free to create
Artists can sell directly to collectors and earn royalties on resales
Artists retain full physical control of their work
NFTs guarantee sales at fixed prices
How are NFTs bought and sold?
Through physical auction houses
On online marketplaces like OpenSea or Rarible
By exchanging them directly for physical goods
They cannot be traded once created
What is a potential risk of owning NFTs?
They lose their uniqueness over time
NFT marketplaces are unstable and inaccessible
They can lose value and are subject to scams or hacks
NFTs cannot be resold
