Types of Stocks Quiz

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Questions and Answers

What is the minimum investment required to purchase a bond in the Philippine market?

  • Php 5,000 (correct)
  • Php 2,500
  • Php 10,000
  • Php 1,000

Which of the following is NOT a variable that affects the value of a bond?

  • Tax status
  • Interest rate
  • Redemption features (correct)
  • Maturity

What is the range for a medium-term bond in the Philippine market?

  • There is no such thing as a medium-term bond
  • 12 or more years
  • 1 to 4 years
  • 5 to 12 years (correct)

Which of the following is NOT a type of interest rate for bonds?

<p>Adjustable (A)</p> Signup and view all the answers

What is the difference between a bond trading at a premium and a bond trading at a discount?

<p>A bond trading at a premium means it is worth more than its par value, while a bond trading at a discount means it is worth less than its par value. (B)</p> Signup and view all the answers

Which type of risk refers to the possibility that an investor will be unable to reinvest cash flows received from an investment?

<p>Reinvestment rate risk (A)</p> Signup and view all the answers

What is the main characteristic of defensive stocks?

<p>They provide regular dividends and stable earnings regardless of market conditions. (C)</p> Signup and view all the answers

What is the primary difference between growth stocks and cyclical stocks?

<p>Growth stocks are expected to have faster profit or revenue growth, while cyclical stocks are tied to the performance of the economy. (C)</p> Signup and view all the answers

In a bond transaction, who is considered the borrower?

<p>The issuer (D)</p> Signup and view all the answers

What is the purpose of a bond?

<p>To finance the issuer's operations and growth. (C)</p> Signup and view all the answers

What is the main characteristic of growth stocks?

<p>They are expected to have faster profit or revenue growth than the industry average. (B)</p> Signup and view all the answers

Which of the following best describes blue chip stocks?

<p>Shares of well-established and financially sound companies that have demonstrated their ability to pay dividends consistently (D)</p> Signup and view all the answers

Which of the following types of stocks are typically considered income stocks?

<p>Stocks of companies with a good history of dividend payments and steady profits (C)</p> Signup and view all the answers

What type of stocks are typically considered defensive stocks?

<p>Stocks of companies that produce essential goods and services and have consistent demand regardless of economic conditions (D)</p> Signup and view all the answers

Which of the following best describes growth stocks?

<p>Stocks of companies with high growth potential but low dividend payments (B)</p> Signup and view all the answers

Which of the following types of stocks are typically considered cyclical stocks?

<p>Stocks of companies that operate in industries that are sensitive to economic conditions and tend to perform well during economic expansions but poorly during recessions (D)</p> Signup and view all the answers

What is the primary difference between Class A and Class B stocks in the Philippines?

<p>Class A stocks can only be traded by Filipino investors, while Class B stocks can be traded by both Filipino and foreign investors (C)</p> Signup and view all the answers

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