Corporate Giants & History
Which company pioneered the modern index fund for retail investors?
A. BlackRock
B. Vanguard
C. Fidelity
D. Charles Schwab
B. Vanguard
What does “bid-ask spread” represent?
A. Broker commission
B. Market volatility
C. Difference between buy & sell prices
D. Dividend yield
C. Difference between buy & sell prices
P/E ratio equals:
A. Price / Earnings per share
B. Profit / Equity
C. Price / Expenses
D. Earnings / Price
A. Price / Earnings per share
Diversification reduces:
A. Market returns
B. Unsystematic (company-specific) risk
C. Inflation risk
D. Interest rates
B. Unsystematic (company-specific) risk
When inflation rises sharply, central banks typically:
A. Raise interest rates
B. Cut Rates
C. Print less money only
D. Buy stocks
A. Raise interest rates
Nvidia’s explosive stock growth (2023–2025) was primarily driven by demand for:
A. Gaming consoles
B. AI/data-center GPUs
C. Smartphones
D. Electric vehicles
B. AI/data-center GPUs
What is “short selling”?
A. Buying undervalued stocks
B. Borrowing shares to sell hoping price falls
C. Holding for long term
D. Selling options only
B. Borrowing shares to sell hoping price falls
If a company has high P/E, investors usually expect:
A. Low growth
B. High future growth
C. Bankruptcy
D. Low risk only
B. High future growth
Efficient Market Hypothesis suggests:
A. Markets always crash
B. Prices reflect available information
C. Stocks are random only
D. Insider trading is legal
B. Prices reflect available information
Yield curve inversion historically signals:
A. Economic boom
B. Stock bubble only
C. Possible recession
D. Currency collapse
C. Possible recession
Which company was broken up in 1984 after a U.S. antitrust case, creating the “Baby Bells”?
A. IBM
B. AT&T
C. General Electric
D. Bell Labs
B. AT&T
The Federal Reserve mainly influences markets by changing:
A. Corporate taxes
B. Interest rates / monetary policy
C. Company profits
D. Stock supply
B. Interest rates / monetary policy
Free Cash Flow is best described as:
A. Net income only
B. Cash after operating expenses & capital expenditures
C. Revenue minus tax
D. Profit before interest
B. Cash after operating expenses & capital expenditures
Dollar-cost averaging helps investors primarily by:
A. Timing the market perfectly
B. Reducing impact of volatility
C. Increasing taxes
D. Maximizing short-term gains
B. Reducing impact of volatility
Which asset is considered a “safe haven”?
A. Small-cap stocks
B. Government bonds (U.S. Treasuries)
C. Penny stocks
D. Growth tech stocks
B. Government bonds (U.S. Treasuries)
Berkshire Hathaway originally started as what type of company?
A. Railroad
B. Insurance
C. Textile manufacturing
D. Steel production
C. Textile manufacturing
What triggers a “margin call”?
A. Stock doubles
B. Account equity falls below required level
C. Interest rates fall
D. Dividend payout
B. Account equity falls below required level
Which metric measures company profitability relative to shareholder equity?
A. ROE
B. EBITDA
C. PEG
D. Current Ratio
A. ROE
Beta measures a stock’s:
A. Profitability
B. Debt level
C. Dividend growth
D. Volatility relative to market
D. Volatility relative to market
Systemic risk refers to:
A. Risk of entire financial system collapsing
B. One company failing
C. Currency exchange only
D. Personal investment loss
A. Risk of entire financial system collapsing
Which company’s 1997 near-bankruptcy was partially saved by a $150M investment from Microsoft?
A. Amazon
B. Apple
C. Dell
D. Intel
B. Apple
Which order executes immediately at the best available price?
A. Limit order
B. Stop order
C. Market order
D. Fill-or-kill order
C. Market order
Discounted Cash Flow (DCF) values a company based on:
A. Current stock price
B. Future cash flows discounted to present value
C. Revenue growth only
D. Market sentiment
B. Future cash flows discounted to present value
Which portfolio lies on the Efficient Frontier?
A. Highest risk only
B. Lowest return only
C. Maximum return for given risk
D. Random allocation
C. Maximum return for given risk
What does the Sharpe Ratio measure?
A. Total return only
B. Risk-adjusted return
C. Market cap growth
D. Dividend stability
B. Risk-adjusted return