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Pop Quiz: What’s Your Stock IQ?

Test your investing know-how then stock up on more investing knowledge with our How-To articles. The more you learn, the more you can earn.

 

1. What is the stock market?

a) A casino where you can gamble and win a lot of money.

b) A marketplace where you can buy and sell shares of companies.

c) A place where farm animals are bought and sold.

d) A place that’s only for rich people to get richer.

 

2. What is a fractional share?

a) The amount an entire company is worth in dollars.

b) A piece of a whole share which offers entry to the stock market at an affordable price.

c) A class of stock that offers special privileges.

d) A fake stock that you can trade without investing real money.

 

3. What is a bull market?

a) A sign that the stock market is closed.

b) A market in which prices are going down, encouraging selling.

c) A market full of super-aggressive traders.

d) A market in which stock prices are going up, encouraging buying.

 

4. What’s an IPO?

a) The first time a company offers its stock to the public.

b) The first time a CEO talks to investors.

b) The last time the public can buy shares of stock before the market closes for the day.

c) What you say when you lose all your money in the stock market.

 

5. True or false:

Coca-Cola is the best performing stock of all time.

 

6. What does the S&P stand for in the S&P 500?

a) Securities & Price

b) Shares & Profits

c) Standard & Poor’s

d) Super & Popular

 

7. Which type of investment is the safest?

a) Cryptocurrency

b) Whatever Warren Buffett picks

c) Pizza

d) A well-diversified portfolio

 

8. True or false:

I should invest in something I have never heard of because my friend told me to.

 

9. What is a dividend?

a) When a company goes bankrupt and sells shares at a discount.

b) Cash the company distributes to its shareholders when it makes money.

c) When a CEO divides up the company into more shares to make it more affordable.

d) Another term for a fractional share.

 

10. What is diversification?

a) Spreading money across different investments to reduce risk.

b) What people mean when they say “don’t put all your eggs in one basket.”

c) The most important component to reaching your long-term goals.

d) All of the above

 

Now, check your answers against the key:

1) b; 2) b; 3) d; 4) a; 5) True. Since its IPO year in 1919, Coke shares have appreciated about 1,062,000%.; 6) c; 7) d; 8) False. You should only invest in something based on the research you do on the company, if it has outstanding potential, and if it is proven with solid financials.; 9) b; 10) d

Nice job. Thanks for testing your Stock IQ! 

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