Which type of analysis focuses on historical price and volume patterns to predict future stock prices?
a. Fundamental analysis
b. Technical analysis
c. Quantitative easing
d. Behavioral finance
b. Technical analysis
A commonly used technical indicator for identifying the trend direction is:
a. Price-to-Earnings Ratio (P/E)
b. Moving Average (MA)
c. Dividend Yield
d. Debt-to-Equity Ratio
b. Moving Average (MA)
The Efficient Market Hypothesis (EMH) suggests that stock price prediction is:
a. Always accurate
b. Possible using simple averages
c. Impossible to do consistently
d. Easy if you follow news
c. Impossible to do consistently
Which of the following is a leading indicator used in technical analysis?
a. GDP growth rate
b. Relative Strength Index (RSI)
c. Net income
d. Annual revenue
b. Relative Strength Index (RSI)
In stock forecasting, “overfitting” refers to:
a. A model that performs poorly on training data
b. A model that performs well on new data but poorly on training data
c. A model that memorizes training data but performs poorly on new data
d. A model with too few parameters
c. A model that memorizes training data but performs poorly on new data
Which type of chart is most commonly used by traders for stock price movement visualization?
a. Pie chart
b. Scatter plot
c. Candlestick chart
d. Histogram
c. Candlestick chart
Sentiment analysis in stock prediction typically uses:
a. Historical dividends
b. News headlines and social media text
c. Company logos
d. Employee counts
b. News headlines and social media text
Which event can cause sudden and unpredictable changes in stock prices?
a. Stable interest rates
b. Regular trading hours
c. Earnings announcements
d. Standard market close
c. Earnings announcements
Fundamental analysis primarily focuses on:
a. Historical price patterns
b. Company financials and economic factors
c. Market rumors
d. Short-term price fluctuations
b. Company financials and economic factors
The Price-to-Earnings (P/E) ratio is used to measure:
a. Company liquidity
b. Market valuation relative to earnings
c. Company’s revenue growth
d. Dividend safety
b. Market valuation relative to earnings
Which metric indicates how much profit a company makes from its revenue?
a. Gross margin
b. Current ratio
c. Earnings per share (EPS)
d. Debt-to-equity ratio
a. Gross margin
A high debt-to-equity (D/E) ratio generally suggests:
a. Low financial risk
b. High liquidity
c. High leverage and financial risk
d. Strong profitability
c. High leverage and financial risk
Which valuation method calculates the present value of expected future cash flows?
a. Dividend yield model
b. Discounted Cash Flow (DCF) analysis
c. Technical charting
d. EBITDA multiplier
b. Discounted Cash Flow (DCF) analysis
Earnings Per Share (EPS) is calculated by:
a. Net income + Total revenue
b. Net income ÷ Shares outstanding
c. Revenue ÷ Shares outstanding
d. Dividends ÷ Shares outstanding
b. Net income ÷ Shares outstanding
Which indicator measures how efficiently a company uses its assets to generate profit?
a. Return on Assets (ROA)
b. Current ratio
c. Price-to-book ratio
d. Dividend payout ratio
a. Return on Assets (ROA)
A company with a high current ratio likely has:
a. Strong short-term liquidity
b. High profitability
c. Lower asset turnover
d. Excessive debt
a. Strong short-term liquidity
Which of the following is considered a macroeconomic factor in fundamental analysis?
a. Company leadership change
b. Moving average crossover
c. Interest rate changes
d. Quarterly earnings guidance
c. Interest rate changes
Stock valuation primarily aims to determine:
a. A company’s total market share
b. The intrinsic value of a stock
c. Future interest rate movements
d. The company’s credit rating
b. The intrinsic value of a stock
The Dividend Discount Model (DDM) values a stock based on:
a. Future stock prices
b. Expected future dividends
c. Company assets
d. Historical earnings
b. Expected future dividends
In the Gordon Growth Model, the stock value increases if:
a. Dividend growth rate decreases
b. Required rate of return increases
c. Dividend per share increases
d. Dividend payout stops
c. Dividend per share increases
The Price-to-Book (P/B) ratio compares the stock price to:
a. Earnings per share
b. Revenue growth
c. Book value per share
d. Future dividend yield
c. Book value per share
Which valuation method estimates value by comparing a company to similar firms?
a. Free cash flow model
b. Comparable company analysis
c. Residual income model
d. Zero-coupon model
b. Comparable company analysis
In a Discounted Cash Flow (DCF) valuation, the discount rate usually represents:
a. Inflation rate
b. Company’s growth rate
c. Risk-adjusted required return
d. Dividend yield
c. Risk-adjusted required return
A higher P/E ratio generally implies that a stock:
a. Has lower expected growth
b. Is undervalued
c. Is highly profitable
d. Is priced high relative to its earnings
d. Is priced high relative to its earnings
