Can You Pass The Finance Vocabulary Quiz? Trivia

The phrase "golden opportunity" typically refers to a favorable or excellent chance to achieve something. In the given context of going bankrupt, it may imply that despite the difficult and unsuccessful time, there is still a chance to turn things around and seize a favorable opportunity to recover financially. It suggests that even in challenging circumstances, there may be a silver lining or a chance for improvement.

During difficult or extreme situations, it becomes necessary to take drastic measures in order to effectively address the problems at hand. These actions may involve making tough decisions or implementing unconventional strategies in order to bring about positive change or overcome challenges. This phrase emphasizes the need to be bold and decisive when faced with adversity, indicating that only serious actions can lead to desired outcomes during tough times.

The correct answer describes the secondary market as the market where securities are traded through an exchange or over-the-counter. It also states that the proceeds from trades in the secondary market go to the selling dealers and investors. This explanation accurately defines the secondary market and explains where the proceeds from trades in this market go.

Default risk refers to the risk that a debt security issuer will not be able to make interest payments on time or repay the principal amount at maturity. This risk is specific to debt securities, such as bonds, and does not apply to equity securities. Therefore, the correct answer is the one that mentions the risk of a debt security issuer being unable to make interest or principal payments, and specifies that it applies only to debt securities.

The correct answer is "A sustained decline in equity prices." This is because a bear market refers to a period of time when stock prices are consistently falling. It is characterized by a negative sentiment in the market, with investors selling off their shares and causing a downward trend in prices. This is opposite to a bull market, which is characterized by a sustained rise in stock prices.

The correct answer is a profitability ratio that shows the company's rate of profit after allowing for cost of goods sold. This means that the gross profit margin measures how much profit a company makes on each dollar of sales, after deducting the cost of producing or purchasing the goods being sold. It is a key indicator of a company's ability to generate profit from its core operations and can be used to assess the efficiency and profitability of a business.

The phrase "Let me bounce this off you" is commonly used to indicate that someone wants to test an idea or plan by sharing it with another person in order to get advice or feedback. It implies that the person is seeking input or opinions from someone else before making a decision or taking further action.

Preferred stock refers to shares that are entitled to a fixed dividend ahead of the company's common shares. This means that preferred stockholders have a higher priority when it comes to receiving dividends compared to common stockholders. Preferred stockholders also have a higher claim on the company's assets in the event of liquidation. However, unlike common stockholders, preferred stockholders usually do not have voting rights.

The phrase "done and dusted" is commonly used to indicate that something is completely finished or ready. It implies that all necessary tasks or actions have been completed and there is nothing more to be done. This phrase is often used to describe the successful completion of a project or task, indicating that it has been fully accomplished and there are no loose ends remaining.

A "lame duck" refers to a person who is unable to do or manage something without help. This term is often used to describe someone who is ineffective or powerless in their position, typically in a political context. It implies that the person lacks the necessary skills, authority, or resources to accomplish tasks independently and requires assistance or support from others.

Common stock represents ownership in a company and typically carries voting rights for shareholders. This means that common stockholders have the right to vote on important company decisions, such as electing board members. Additionally, common stockholders are entitled to receive dividends, which are a portion of the company's profits distributed to shareholders. However, common stockholders are only entitled to receive dividends after preferred stockholders have been paid their dividends, if dividends are declared. Preferred stockholders have priority when it comes to receiving dividends, hence common stockholders receive dividends after preferred stockholders have been paid.

NAVPS stands for Net Asset Value Per Share. It represents the market value of the fund's share and is calculated by subtracting the fund's liabilities from its total assets. This value reflects the worth of each share in the fund and is commonly used to determine the price at which investors can buy or sell shares in the fund.

Capital loss refers to selling a security for less than its purchase price. This means that the investor incurs a loss on the investment. It is the opposite of capital gain, where the security is sold for more than its purchase price, resulting in a profit. Capital losses can be used to offset capital gains and reduce the amount of taxable income.

The phrase "work your fingers to the bone" means to work very hard. This expression suggests that someone is putting in a great deal of effort and exertion in their work, to the point where it may be physically exhausting. The use of the word "bone" emphasizes the intensity and depth of the hard work being done.

The correct answer is "An investment approach that seeks out undervalued companies." This answer is supported by the statement "An investment approach that seeks out undervalued companies." This suggests that the bottom-up investment approach involves identifying companies that are undervalued, meaning their stock prices do not accurately reflect their true value. This approach focuses on analyzing individual companies rather than general trends in the economy. It is an active and leading approach, suggesting that it involves actively seeking out these undervalued companies.

A put option is a financial contract that gives the holder the right, but not the obligation, to sell a specified number of shares at a predetermined price within a set period of time. This means that the holder of a put option has the right to sell the shares at the agreed-upon price, regardless of the actual market price. It is often used as a form of insurance or hedging strategy against a potential decline in the value of the underlying shares.

Canola or wheat are examples of commodities because they are raw materials or primary agricultural products that can be bought and sold in large quantities. These commodities are typically used as inputs in the production of other goods or as food products. Unlike government bonds or company stocks, which represent ownership or debt in a specific entity, canola or wheat are physical goods that have standardized quality and can be traded on commodity exchanges.

Depletion refers to the consumption of natural resources that are considered as assets for a company. This means that the company is using up these resources, reducing the quantity or availability of them over time. Depletion is different from other forms of consumption as it specifically relates to the utilization of natural resources that are owned by the company and are essential for its operations.

The correct answer is "Enterprise value/EBITDA." This ratio is known as the Enterprise Multiple, which is used to assess the value of a company relative to its earnings. It calculates the enterprise value (market value of equity plus debt) divided by EBITDA (earnings before interest, taxes, depreciation, and amortization). A lower multiple indicates that the company is relatively undervalued, while a higher multiple suggests overvaluation. This ratio is commonly used in the financial industry to compare companies within the same industry or to evaluate potential investment opportunities.

The correct answer is "A measure of the sensitivity of a stock or a mutual fund to movements in the overall stock market." This is because beta is a statistical measure that indicates how closely the price of a stock or a mutual fund moves in relation to the overall stock market. A beta value of 1 means that the stock or mutual fund tends to move in line with the market, while a beta greater than 1 indicates that it is more volatile than the market, and a beta less than 1 suggests that it is less volatile. Therefore, beta is used to assess the risk and potential return of an investment in relation to the market.

not-available-via-ai

The correct answer is "profit before interest and taxes/average interest and bank charges". The coverage ratio is a financial metric that measures a company's ability to cover its interest and bank charges with its profit before interest and taxes. By dividing the profit before interest and taxes by the average interest and bank charges, the coverage ratio indicates the extent to which a company's earnings can cover its financial obligations. A higher coverage ratio suggests that the company is more capable of meeting its interest and bank charges, while a lower ratio indicates a higher risk of default.

The debt-to-equity ratio is a financial metric that indicates the proportion of debt and equity used to finance a company's assets. It is calculated by dividing the total liabilities by the shareholder equity. This ratio is important for investors and creditors as it helps assess the financial risk of a company. A higher debt-to-equity ratio indicates a higher level of financial leverage and potential risk, while a lower ratio suggests a more conservative financial structure.

A call option is a financial contract that gives the holder the right, but not the obligation, to buy a specified number of shares at a predetermined price within a certain time frame. Therefore, the correct answer is "a right to buy a specified number of shares." This means that the holder of a call option has the option to purchase the shares at the agreed-upon price, known as the strike price, if they choose to do so.

The phrase "rushed off your feet" means to be extremely busy. This expression implies that someone is overwhelmed with tasks or responsibilities and does not have much free time. It suggests a high level of activity and a lack of leisure or relaxation. Therefore, the correct answer for this question is "be extremely busy."

The correct answer is "Money owed to a company for goods and services it has sold." This means that accounts receivable refers to the amount of money that customers owe to a company for products or services that have been provided to them. It represents the company's assets as it expects to receive the payment in the future.

A floating-rate debenture is a type of debenture that offers protection to investors during periods of very volatile interest rates. This means that the interest rate on the debenture will change in response to changes in the market interest rates. This can be beneficial for investors during times of high interest rate volatility, as it allows them to potentially earn higher returns if interest rates increase. This type of debenture provides a level of flexibility and risk mitigation for investors in uncertain interest rate environments.

The correct answer is total assets (current and fixed)/total liabilities. This ratio is used to assess a company's financial leverage and indicates the proportion of a company's assets that are financed by debt. A higher ratio suggests that a larger portion of the company's assets are funded by debt, which can indicate higher financial risk. Conversely, a lower ratio suggests a lower level of financial risk and a higher proportion of assets funded by equity.

The dividend payout ratio is a financial metric that shows the proportion of earnings that a company distributes to its shareholders in the form of dividends. It is calculated by dividing the yearly dividend per share by the earnings per share. This ratio indicates how much of the company's profits are being returned to investors. A higher dividend payout ratio suggests that the company is distributing a larger portion of its earnings as dividends, while a lower ratio indicates that the company is retaining more earnings for reinvestment or other purposes.

The phrase "get something off the ground" means to start or initiate something after having planned and organized it. It implies taking the necessary steps to put a project or activity into operation and make it functional. This could involve coordinating resources, setting up processes, and ensuring that everything is ready for execution. It does not refer to being involved in all aspects of work, knowing how to do the activity correctly, or making one's own decisions.

A debenture is a type of financial instrument that represents a certificate of indebtedness issued by a company or government entity. It is a form of long-term borrowing where the issuer promises to repay the principal amount along with interest at a specified rate and within a specific time frame. Therefore, the correct answer is "a certificate of indebtedness."

This explanation suggests that an auction market is a type of market where securities are bought and sold by brokers who act as agents. In this market, brokers represent the interests of their clients and facilitate the transactions between buyers and sellers. This is different from an over-the-counter market where securities are bought and sold directly between parties without the involvement of brokers.

CPI, or Consumer Price Index, is a measure that calculates the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is used to gauge the cost of living and inflation rates. By tracking the prices of various goods and services, CPI provides an indication of how much it costs for consumers to maintain a certain standard of living. Therefore, the correct answer is that CPI measures the cost of living.

When securities are transferred into an RRSP, it is considered as an asset transfer, leading to a deemed disposition. This means that the transfer is treated as if the securities were sold at their fair market value. However, no taxes are paid on this deemed disposition. Additionally, any capital losses that occur as a result of this transfer can be claimed.

Treasury shares are shares of a company's own stock that have been repurchased by the company. These shares are held by the company itself and are not available for public trading. Since treasury shares are owned by the company, they do not have voting rights as they cannot vote on company matters. Additionally, since they are not available for public trading, they do not receive dividends like outstanding shares do. Therefore, treasury shares are not entitled to dividends and do not have voting rights.