Question 1

What term describes the risk that an investment's value will decrease due to changes in market factors?

Accepted Answer

Market risk

Answer

Liquidity risk

Answer

Credit risk

Answer

Operational risk

Question 2

When a company's stock price falls below $1 for an extended period, it risks being labeled as what?

Accepted Answer

Penny stock

Answer

Micro cap

Answer

Value trap

Answer

Blue chip

Question 3

What financial term describes the practice of spreading investments across different assets to reduce risk?

Accepted Answer

Diversification

Answer

Hedging

Answer

Arbitrage

Answer

Leverage

Question 4

What term describes the minimum amount required to maintain a trading position and avoid a margin call?

Accepted Answer

Maintenance margin

Answer

Break even

Answer

Strike price

Answer

Stop limit

Question 5

What is the term for selling an asset at a loss to reduce taxes by offsetting capital gains?

Accepted Answer

Tax harvesting

Answer

Tax evasion

Answer

Tax deferral

Answer

Tax basis

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