comprehensive Questions Bank
With 100% Correct Answers
Fundamental analysis - answer determinants of firm
value, specifically looking at company's financial
statements to forecast the earnings and cash flows of the
company
Technical analysis - answer Analysis of historical price
and volume to locate patterns in stock price behavior
10 k - answer annual report, in depth, audited at the end
of the fiscal year
10 q - answer quarterly report; snapshot, audited , within
45 days of quarter
8 k - answer unscheduled materiel events that are
important to shareholder
,Income statement - answer Earning before interest,
taxes , depreciation, and amortaiztion
Cash flow statement - answer noncash items that
account for cash flow from operation, investment, and
financing
Balance sheet - answer measures your liquidity and your
assets=liabilities + equity
Corporate governance - answer separation of
management and ownership and a mechanism for
reducing agency cost
Top down approach - answer analyze the economy then
the industry then the firm
Attributes of fundamental analysis - answer Competition,
revenue, profit margin, and company managment
Technical analysis - answer analyze stock prices and
trading volume(locate patterns in stock price behavior)
candlestick chart - answer if closing price is higher then
the body is unfilled or open
,bullish signal - answer When market price breaks
through the moving average line from below, it is time to
buy
bearish signal - answer When prices fall below the
moving average, it is time to sell.
bubbles(confirmed only after burst) - answer sharp quick
spikes upwards in prices are the classics
day trading - answer buying and selling within the same
trading day
swing trading(short period trading) - answer Identify
"channels" or "tunnels" of price movements on a stock's
chart and then buying when the price gets to the bottom
of the channel and selling when it gets to the top
penny stocks - answer price less than $5 and traded
outside major exchanges
buy and hold - answer buy stock of sold companies and
hold them for a long time for steady return
, growth at a reasonable price - answer stocks growing at
a more moderate, sustainable rate may be smart
purchases because they tend to deliver more profit with
less risk
investor sentiment - answer investors attitude towards
the market
Arbitrage - answer taking advantage of price differences
in at least two different markets. By making
simultaneous deals to maximize this difference
option - answer agreement that give the holder the
option to buy or sell
call options(price will go up) - answer call option gives
the holder the right to buy underlying security for an
agreed price (the strike price) by an agreed date in the
future ( expiration date ).
put options - answer put option gives the holder the right
to sell underlying security for an agreed price (the strike
price) by an agreed date in the future ( expiration date ).