Stocks Basics and Capital Gains Quiz

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Questions and Answers

Which of the following is an example of a capital gain?

Buying 100 shares of Company XYZ at $125.00 a share and selling it for $100.00 a share
Buying 100 shares of Company XYZ at $100.00 a share and selling it for $125.00 a share (correct)
Buying 100 shares of Company XYZ at $90.00 a share and selling it for $100.00 a share
Buying 100 shares of Company XYZ at $100.00 a share and selling it for $90.00 a share

Which of the following is an example of a dividend?

Company XYZ declaring an annual dividend of PhP10.00 a share (correct)
Company XYZ decreasing the price of its shares by PhP10.00
Company XYZ increasing the price of its shares by PhP10.00
Company XYZ selling its shares at a discount of PhP10.00

What is an IPO?

An investment portfolio option
An international stock exchange
An initial public offering, a way for a company to raise growth money for expansion (correct)
An investment strategy

What is a downside of an IPO?

Giving up control of the company (A) Signup and view all the answers

What factors can greatly affect the stock market?

Economics, social, and political factors (C) Signup and view all the answers

What is a capital gain?

A profit made when selling stock at a higher price than the purchase price. Signup and view all the answers

Can you provide an example of a capital gain?

If you buy 100 shares of Company XYZ at $100.00 a share and sell them for $125.00 a share, you've realized a capital gain of $25.00 a share, or $2,500.00. Signup and view all the answers

What are dividends?

Dividends are the distribution of profits from a company to the stockholders. Signup and view all the answers

Can you give an example of dividends?

If Company XYZ declares an annual dividend of PhP10.00 a share and you own 100 shares, you'll earn PhP1000.00 a year, or PhP250.00 paid each quarter. Signup and view all the answers

What is an IPO?

IPO stands for Initial Public Offering, which is a great way for companies to raise growth money for expansion, but it also means giving up control of the company. Signup and view all the answers