Stocks and Share MCQs with Answers

What is a dividend?
a) A fee paid for buying shares
b) The portion of profit paid to shareholders
c) The total value of a company’s shares
d) A type of stock

What is a stock split?
a) Merging two companies
b) Issuing more shares to shareholders
c) Reducing the price of a share
d) Dividing the company’s assets

What does IPO stand for?
a) Initial Public Offering
b) Investment Portfolio Option
c) International Price Order
d) Internal Product Offering

What is a blue-chip stock?
a) A stock from a new company
b) A highly-valued stock
c) A stock with low market value
d) A stock traded in foreign markets

What does a bearish market indicate?
a) Rising stock prices
b) Declining stock prices
c) Stable stock prices
d) High trading volume

What is the purpose of a stock exchange?
a) To facilitate the buying and selling of shares
b) To lend money to businesses
c) To regulate inflation
d) To set government policies

What is a portfolio?
a) A financial statement
b) A collection of investments
c) A list of company employees
d) A type of stock option

What is market capitalization?
a) The total value of a company’s shares
b) The highest price of a stock
c) The average trading volume
d) The amount of dividend paid

What is a stock’s ticker symbol?
a) A unique identifier for the stock
b) The price of the stock
c) The company’s name
d) The stock’s trading volume

What does P/E ratio stand for?
a) Price to Equity ratio
b) Price to Earnings ratio
c) Profit to Earnings ratio
d) Profit to Equity ratio

What is a bond?
a) A type of stock
b) A loan made by investors to a corporation or government
c) A dividend paid to shareholders
d) A market where stocks are traded

What is an index fund?
a) A fund that tracks the performance of a specific market index
b) A high-risk investment fund
c) A fund that only invests in technology stocks
d) A type of government bond

What is a bull market?
a) A market condition where prices are rising
b) A market with high trading volume
c) A market with low trading volume
d) A market condition where prices are falling

What does the term “liquidity” refer to in the stock market?
a) The ease with which an asset can be converted into cash
b) The amount of debt a company has
c) The total value of a company’s shares
d) The number of shares issued by a company

What is a mutual fund?
a) A fund that allows investors to pool their money to invest in a diversified portfolio of assets
b) A fund that invests only in government bonds
c) A fund that guarantees a fixed return
d) A fund that trades on a stock exchange

What is a stock’s “beta”?
a) A measure of its price volatility in relation to the market
b) The stock’s dividend yield
c) The stock’s market capitalization
d) The stock’s trading volume

What is an ETF?
a) Exchange-Traded Fund
b) Equity Transfer Fund
c) Exchange Trade Fee
d) Equity Trading Facility

What is a capital gain?
a) Profit earned from the sale of an asset
b) Interest earned on a savings account
c) Income from dividends
d) A loan made to a corporation

What does the term “diversification” refer to?
a) Investing in different types of assets to reduce risk
b) Investing in only one type of asset
c) Selling all investments and holding cash
d) Increasing investment in a single stock

What is a market order?
a) An order to buy or sell a stock immediately at the best available price
b) An order to buy or sell a stock at a specific price
c) An order to sell all shares of a stock
d) An order to buy shares in a new IPO

What is an insider in the context of the stock market?
a) A person who owns more than 5% of a company’s shares
b) A company’s employee who has access to non-public information
c) A stockbroker who trades stocks for clients
d) An investor with high trading volume

What is a bear market?
a) A market condition where stock prices are falling
b) A market with high trading volume
c) A market with stable prices
d) A market condition where stock prices are rising

What is an option in stock trading?
a) A financial instrument that gives the holder the right to buy or sell a stock at a specific price
b) A stock that pays high dividends
c) A bond issued by a corporation
d) A stock issued by a new company

What is a margin account?
a) An account that allows an investor to borrow money to purchase securities
b) An account that only holds cash
c) An account for buying government bonds
d) An account that requires a minimum balance

What does the term “short selling” mean?
a) Selling stocks that the seller does not own
b) Buying stocks with the expectation that prices will rise
c) Selling stocks at a loss
d) Buying stocks at a discounted price

What is a stop-loss order?
a) An order to sell a stock when it reaches a certain price
b) An order to buy a stock at a lower price
c) An order to buy a stock immediately
d) An order to sell all shares in a portfolio

What is a common stock?
a) A type of stock that entitles the holder to vote at shareholders’ meetings
b) A type of stock that guarantees fixed dividends
c) A stock that is not traded on the stock exchange
d) A stock issued by the government

What is a preferred stock?
a) A stock with fixed dividend payments
b) A stock with voting rights
c) A stock traded on international markets
d) A stock with variable dividend payments

What is the ex-dividend date?
a) The date by which a buyer must own the stock to receive the next dividend
b) The date when the dividend is paid
c) The date when the company announces its dividend
d) The date when the company’s shares go public

What is a bond yield?
a) The interest rate paid by the bond
b) The price at which the bond is traded
c) The maturity date of the bond
d) The face value of the bond

What is an index?
a) A statistical measure of changes in a portfolio of stocks
b) A measure of a company’s profit
c) A financial instrument that represents ownership in a company
d) A type of government bond

What is market sentiment?
a) The overall attitude of investors toward a particular security or market
b) The amount of money invested in the market
c) The total market capitalization
d) The volatility of a stock

What is the bid-ask spread?
a) The difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept
b) The commission paid to a broker
c) The price at which a stock is traded
d) The profit made from a trade

What is a company’s balance sheet?
a) A financial statement that summarizes a company’s assets, liabilities, and shareholders’ equity
b) A report on a company’s profit and loss
c) A summary of a company’s cash flow
d) A list of a company’s directors

What is a proxy in the context of corporate voting?
a) A person authorized to vote on behalf of a shareholder
b) A stockbroker who trades on the stock exchange
c) A type of preferred stock
d) A financial instrument used for hedging

What is a dividend yield?
a) The annual dividend per share divided by the stock’s price per share
b) The total dividends paid by a company
c) The interest rate paid by bonds
d) The price of the stock after dividend payment

What is a stock’s par value?
a) The nominal value of the stock set by the issuing company
b) The market value of the stock
c) The dividend paid by the stock
d) The amount of profit earned from the stock

What is capital appreciation?
a) An increase in the value of an asset over time
b) The interest earned on a savings account
c) The dividends paid to shareholders
d) The initial price of a stock

What is an annual report?
a) A comprehensive report on a company’s activities and financial performance throughout the preceding year
b) A report on the company’s stock price performance
c) A report on the company’s dividend payments
d) A report on the economic outlook for the next year

What is a stockbroker?
a) A person who buys and sells stocks on behalf of clients
b) A person who issues bonds
c) A company that manufactures goods
d) A bank that lends money to businesses