Investment Basics

15 Questions | Total Attempts: 145

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Investment Quizzes & Trivia

Questions and Answers
  • 1. 
    Ben owns stock in Apple, which is currently paying $2.65 in annual dividends.  Ben is guaranteed to receive a dividend as long as he owns Apple stock.  
    • A. 

      True

    • B. 

      False

  • 2. 
    What are the way(s) that a company can use the profits that their business generates?
    • A. 

      Invest in their own business

    • B. 

      Pay dividend to shareholders

    • C. 

      Acquire other companies

    • D. 

      All of the above

  • 3. 
    _________________  for a company comes from the sale of its goods and services to customers.  For example, McDonald's ________ comes from selling Big Macs, shakes and other food products.  
    • A. 

      Costs

    • B. 

      Revenue

    • C. 

      Expenses

    • D. 

      Income Statement

  • 4. 
    Victor owns 100 shares of Starbucks stock.  Starbucks pays an ANNUAL dividend of $1.00 (note that companies typically pay dividends quarterly).  Victor will receive his first QUARTERLY dividend on September 30th.  The dividend check will be for:  
    • A. 

      $100

    • B. 

      $1.00

    • C. 

      $25

    • D. 

      Zero

  • 5. 
    Taking a company's earnings and dividing by the number of shares of the company's stock that is outstanding results in a company's ________________
    • A. 

      Dividend Yield

    • B. 

      EPS (Earnings Per Share)

    • C. 

      Market Capitalization

    • D. 

      None of the above

  • 6. 
    One difference between investing in stocks and savings accounts is:
    • A. 

      Savings accounts trade on an exchange while stocks do not

    • B. 

      An investor can always earn more from savings account than from investing in a stock

    • C. 

      Savings accounts are more risky than investing in stocks

    • D. 

      An investor can lose money investing in stocks but won't lose money from a savings account with FDIC insurance

  • 7. 
    Owning a share of a stock in a company means:
    • A. 

      You own part of a company

    • B. 

      You are eligible to receive a dividend from a company (if they pay dividends)

    • C. 

      You have a vote in selecting the members of their Board of Directors

    • D. 

      All of the above

    • E. 

      None of the above

  • 8. 
    According to Peter Lynch, when you invest in a company by buying their shares, you should invest for the long-term.  What is the long-term in Peter Lynch's view?
    • A. 

      1 year

    • B. 

      5 years

    • C. 

      20 years

    • D. 

      10 years

  • 9. 
    The higher the risk in an investment, the higher the expected return.  For example, an investor like Ben who invests in start-up technology companies expects to earn a higher return than an investor in a large established company like Starbucks since the start-up is higher-risk.  
    • A. 

      True

    • B. 

      False

  • 10. 
    The S&P500, NASDAQ and Dow Jones are examples of:
    • A. 

      Stock reports

    • B. 

      Companies

    • C. 

      Stock indices (plural of index)

    • D. 

      Stock exchanges

  • 11. 
    Home Depot pays an annual dividend of $1.20.  Their current stock price is $57.00.  Calculate their dividend yield.
    • A. 

      2.1%

    • B. 

      12.0%

    • C. 

      20.2%

    • D. 

      5.4%

  • 12. 
    This week, Nike's stock rose from $50 to $53 per share.  Starbucks rose from $20 to $30 per share and Jamba Juice rose from $2.50 to $5.00 per share.  Which stock had the highest percentage gain in value?
    • A. 

      Starbucks

    • B. 

      Nike

    • C. 

      Jamba Juice

  • 13. 
    If Wal-Mart's EPS (Earnings per Share) is $4 and its stock is currently trading at $60 per share, then its P/E (Price to Earnings ratio) is ___________
    • A. 

      12

    • B. 

      20

    • C. 

      15

    • D. 

      Other

  • 14. 
    Holding stocks from different sectors (or industries) helps an investor achieve what goal?
    • A. 

      Marginalization

    • B. 

      Valuation

    • C. 

      Growth

    • D. 

      Diversification

  • 15. 
    David buys 100 shares of Pepsi at $33 per share.  In one year, he sells his Pepsi stock for $40 per share.  He also receives a $1.00 per share dividend during his one year holding period.  His total GAIN is:
    • A. 

      $700

    • B. 

      $500

    • C. 

      $800

    • D. 

      None of the above