What Do You Know About Stock Traders? Quiz

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What Do You Know About Stock Traders? Quiz - Quiz

What do you know about the stock market and stock traders? Take this quiz and gather some information about it. One of the ways through which people make an earning is through the buying of shares of a company when the share price is low and selling it back when it is high. This profession is very keen on attention to detail and being aware of the changes in the economy around us. Play the quiz below to see if you have what it takes to trade stocks well.


Questions and Answers
  • 1. 

    One can profit from stocks by

    • A.

      Buying high and selling low

    • B.

      Buying low and selling high

    • C.

      Buying and selling at the same price

    • D.

      All of the above

    Correct Answer
    B. Buying low and selling high
    Explanation
    Buying low and selling high is a fundamental strategy in stock trading that allows investors to profit from the price difference. By purchasing stocks at a lower price and then selling them at a higher price, investors can make a profit. This strategy takes advantage of market fluctuations and aims to capitalize on the potential for stock prices to increase over time.

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  • 2. 

    The Volatility Index (VIX) is  

    • A.

      A spot check of the number of floor traders at work on a given day

    • B.

      A gauge of the likelihood that the stock market will shut down due to an unexpected event

    • C.

      An indicator used to measure the perceived volatility of stock prices

    • D.

      All of the above

    Correct Answer
    C. An indicator used to measure the perceived volatility of stock prices
    Explanation
    The correct answer is "An indicator used to measure the perceived volatility of stock prices." The Volatility Index (VIX) is a popular measure of market volatility and is often referred to as the "fear index." It is calculated based on the prices of options on the S&P 500 index and is used to gauge investors' expectations for future market volatility. A higher VIX value indicates higher expected volatility, while a lower value indicates lower expected volatility. Therefore, it is an important tool for investors to assess market risk and make informed trading decisions.

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  • 3. 

    Which of the following is(was) not a stock exchange?  

    • A.

      HQSX

    • B.

      NASDAQ

    • C.

      NYSE

    • D.

      ASDF

    Correct Answer
    A. HQSX
  • 4. 

    EBITDA stands for  

    • A.

      End Buying, Initial Tax and Daily Allowance

    • B.

      Even Bidding and Internal Testing of Daily Adjustments

    • C.

      Earnings Before Interest, Taxes, Depreciation and Amortization

    • D.

      All of the above

    Correct Answer
    C. Earnings Before Interest, Taxes, Depreciation and Amortization
    Explanation
    EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization. It is a financial metric that measures a company's profitability by excluding certain expenses such as interest, taxes, depreciation, and amortization. EBITDA is commonly used by investors, analysts, and financial institutions to evaluate a company's operating performance and compare it to other companies in the same industry. By excluding non-operating expenses, EBITDA provides a clearer picture of a company's ability to generate cash flow from its core operations.

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  • 5. 

    Stock symbols MMI and MSI replaced what single ticker symbol? 

    • A.

      MRI

    • B.

      MOT

    • C.

      MTR

    • D.

      All of the above

    Correct Answer
    B. MOT
    Explanation
    The correct answer is MOT. The stock symbols MMI and MSI replaced the single ticker symbol MOT.

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  • 6. 

    A double short ETF is 

    • A.

      A short-term entry agreement between buyer and seller

    • B.

      A way of arbitrating a dispute when two people own the same stock

    • C.

      A 2X shorting vehicle for a particular market sector

    • D.

      None of the above

    Correct Answer
    C. A 2X shorting vehicle for a particular market sector
    Explanation
    A double short ETF is a 2X shorting vehicle for a particular market sector. This means that it is an exchange-traded fund (ETF) that aims to provide investors with twice the inverse return of a specific market sector. In other words, if the market sector goes down by a certain percentage, the double short ETF will aim to go up by twice that percentage. It is designed for investors who want to profit from a decline in a specific market sector.

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  • 7. 

    In pre and post market trading, an allowable order type is 

    • A.

      A limit order

    • B.

      A market order

    • C.

      A takeover order

    • D.

      All of the above

    Correct Answer
    A. A limit order
    Explanation
    A limit order is an allowable order type in both pre and post market trading. This type of order allows investors to set a specific price at which they are willing to buy or sell a security. It ensures that the trade will only be executed at the specified price or better, providing control over the execution price. Market orders, on the other hand, are executed immediately at the prevailing market price, while takeover orders are not commonly used order types in regular trading. Therefore, the correct answer is A limit order.

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  • 8. 

    A stock's PE is 

    • A.

      The Predicted Eventuality that the stock will close at a given price

    • B.

      The Price to Earnings ratio of the stock

    • C.

      The Perceived Entry point of the stock into the marketplace

    • D.

      All of the above

    Correct Answer
    B. The Price to Earnings ratio of the stock
    Explanation
    The correct answer is "The Price to Earnings ratio of the stock." The PE ratio is a financial metric used to evaluate the relative value of a company's stock. It is calculated by dividing the market price per share by the earnings per share. The PE ratio provides insight into how much investors are willing to pay for each dollar of earnings generated by the company. A higher PE ratio suggests that investors have higher expectations for future earnings growth, while a lower PE ratio may indicate that the stock is undervalued.

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  • 9. 

    Stocks that have small bottom-to-top trading ranges in a given timeframe are 

    • A.

      Low beta stocks

    • B.

      Low-T stocks

    • C.

      Closely framed stocks

    • D.

      All of the above

    Correct Answer
    A. Low beta stocks
    Explanation
    Low beta stocks are stocks that have a low level of volatility compared to the overall market. They tend to have small bottom-to-top trading ranges in a given timeframe, meaning that their prices do not fluctuate significantly. This makes them less risky and more stable investments compared to high beta stocks. Therefore, the correct answer is low beta stocks.

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  • 10. 

    FOREX typically refers to 

    • A.

      Formulated Expectation of a stock's trading volume

    • B.

      Forced Execution of trades by computers

    • C.

      Foreign Exchange

    • D.

      All of the above

    Correct Answer
    C. Foreign Exchange
    Explanation
    The correct answer is "Foreign Exchange" because FOREX is an acronym for Foreign Exchange, which refers to the global marketplace for trading currencies. It involves the buying and selling of different currencies with the aim of making a profit from fluctuations in their exchange rates. The other options, Formulated Expectation of a stock's trading volume and Forced Execution of trades by computers, are not accurate explanations of FOREX.

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  • 11. 

    Margin compression occurs  when

    • A.

      All of the available stock for a company has been sold

    • B.

      The profit that a company makes on a sold item decreases

    • C.

      A company's stock experiences a drop in its marginal price per share

    • D.

      All of the above

    Correct Answer
    B. The profit that a company makes on a sold item decreases
    Explanation
    Margin compression occurs when the profit that a company makes on a sold item decreases. This means that the company is earning less money per item sold, which can happen due to various factors such as increased competition, rising costs, or pricing pressure from customers. When the profit margin decreases, it can negatively impact the company's overall profitability and financial performance.

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  • 12. 

    The average value of a stock's price over a rolling 50 day period is 

    • A.

      The 50 day moving average

    • B.

      The 50 day concensus term

    • C.

      The 50 day adjustment point

    • D.

      All of the above

    Correct Answer
    A. The 50 day moving average
    Explanation
    The correct answer is "The 50 day moving average." The average value of a stock's price over a rolling 50 day period is commonly referred to as the 50 day moving average. This moving average is used by investors and traders to analyze the overall trend and momentum of a stock's price over a specific time frame. It smooths out short-term fluctuations and provides a clearer picture of the stock's performance over the given period.

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  • 13. 

    The total number of shares of a company's stock multiplied by the current share price is the  

    • A.

      Net Share Allocation

    • B.

      Stock Distribution

    • C.

      Market Capitalization

    • D.

      All of the above

    Correct Answer
    C. Market Capitalization
    Explanation
    Market capitalization is calculated by multiplying the total number of shares of a company's stock by the current share price. It represents the total market value of a company's outstanding shares and is used to assess the size and worth of a company. Net Share Allocation and Stock Distribution do not accurately describe this calculation, making Market Capitalization the correct answer.

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  • 14. 

    A company has just issued an IPO. This means that it has 

    • A.

      Released the specifics of its Internal Purchasing Operation

    • B.

      Made an Initial Public Offering of stock

    • C.

      Announced that it is in compliance with International Profit Organization rules

    • D.

      All of the above

    Correct Answer
    B. Made an Initial Public Offering of stock
    Explanation
    The correct answer is "Made an Initial Public Offering of stock." An IPO refers to the first sale of a company's shares to the public, allowing it to raise capital by offering ownership to outside investors. This process enables the company to transition from being privately owned to becoming a publicly traded entity. It is a significant event for a company as it provides an opportunity for investors to buy shares and become shareholders in the company.

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  • 15. 

    When the buyer of a stock sets a pre-determined maximum price that he or she is willing to pay, the buyer is placing a 

    • A.

      Set Purchase Arrangement(SPA)

    • B.

      Negotiated Price Point Order

    • C.

      Limit Order

    • D.

      All of the above

    Correct Answer
    C. Limit Order
    Explanation
    A limit order is a type of order placed by a buyer in the stock market where they set a maximum price they are willing to pay for a stock. This means that the buyer will only purchase the stock if it is available at or below their specified price. It allows the buyer to have control over the price they are willing to pay and helps to prevent them from overpaying for a stock. Therefore, the correct answer is a Limit Order.

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  • 16. 

    The group that sets the rules for pattern day trading is 

    • A.

      FINRA

    • B.

      The SEC

    • C.

      The Federal Trade Commission

    • D.

      All of the above

    Correct Answer
    A. FINRA
    Explanation
    FINRA, the Financial Industry Regulatory Authority, is the group that sets the rules for pattern day trading. FINRA is a self-regulatory organization that oversees brokerage firms and their registered representatives. They establish and enforce rules and regulations to protect investors and maintain fair and orderly markets. The SEC, the Securities and Exchange Commission, is a government agency that also plays a role in regulating the securities industry, but FINRA specifically focuses on setting rules for day trading activities. The Federal Trade Commission, on the other hand, is primarily responsible for protecting consumers and preventing anticompetitive business practices, and is not directly involved in regulating day trading.

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  • 17. 

    When a company purchases shares of its stock from current shareholders this is called a 

    • A.

      Share buyback

    • B.

      Dvidend

    • C.

      Stock split

    • D.

      All of the above

    Correct Answer
    A. Share buyback
    Explanation
    A share buyback refers to the process where a company buys back its own shares from existing shareholders. This can be done for various reasons, such as to increase shareholder value, reduce the number of outstanding shares, or signal confidence in the company's financial health. Unlike dividends, which are periodic payments made to shareholders, a share buyback involves the company directly purchasing its own stock. A stock split, on the other hand, involves dividing existing shares into multiple shares to adjust the stock price. Therefore, the correct answer is share buyback.

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  • 18. 

    The term M & A typically refers to

    • A.

      The Mean Amount of shares traded per time period

    • B.

      Mergers and Acquisitions

    • C.

      Criteria for a stock trade being Met and Affirmed

    • D.

      All of the above

    Correct Answer
    B. Mergers and Acquisitions
    Explanation
    The term M&A typically refers to mergers and acquisitions. Mergers involve the combination of two or more companies to form a new entity, while acquisitions involve one company purchasing another. M&A activities are common in the business world and are often undertaken to achieve strategic objectives such as expanding market share, diversifying product offerings, or gaining access to new technologies or markets. The term M&A does not refer to the mean amount of shares traded per time period or the criteria for a stock trade being met and affirmed.

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  • 19. 

    When a stock's price goes from historical highs down to a previously-attained lower milestone this is called

    • A.

      Recalibration

    • B.

      Retrenchment

    • C.

      Retracement

    • D.

      Reincarnation

    Correct Answer
    C. Retracement
    Explanation
    Retracement is the correct answer because it refers to a temporary reversal in the price of a stock or any other financial asset from its current trend. It occurs when the price moves in the opposite direction of the prevailing trend, typically after reaching a new high or low. In this case, the stock's price going from historical highs down to a previously-attained lower milestone represents a retracement. The term "recalibration" does not accurately capture this concept, while "retrenchment" and "reincarnation" are unrelated to stock price movements.

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  • 20. 

    Coffee, cocoa, sugar, wheat and corn are examples of

    • A.

      Soft commodities

    • B.

      Hard commodities

    • C.

      Stocks that frequently experience mean reversion

    • D.

      All of the above

    Correct Answer
    A. Soft commodities
    Explanation
    Coffee, cocoa, sugar, wheat, and corn are all examples of soft commodities. Soft commodities refer to agricultural products that are grown rather than mined or extracted. These commodities are typically traded on commodity exchanges and are subject to price fluctuations based on factors such as weather conditions, supply and demand, and geopolitical events. Soft commodities are different from hard commodities, which include metals and energy resources. Therefore, the correct answer is soft commodities.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Aug 29, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • May 04, 2011
    Quiz Created by
    Gsmoothe
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