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?

Adjustable (A) Signup and view all the answers

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

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) 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?

Reinvestment rate risk (A) Signup and view all the answers

What is the main characteristic of defensive stocks?

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

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

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

In a bond transaction, who is considered the borrower?

The issuer (D) Signup and view all the answers

What is the purpose of a bond?

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

What is the main characteristic of growth stocks?

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

Which of the following best describes blue chip stocks?

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

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

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

What type of stocks are typically considered defensive stocks?

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

Which of the following best describes growth stocks?

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

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

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) Signup and view all the answers

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

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

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