Stock Market Terminology (Bull, Bear, IPO, etc.) MCQs

1. A “bull market” refers to:
(A) Falling stock prices
(B) Rising stock prices
(C) Stable stock prices
(D) Government-controlled market

2. A “bear market” is characterized by:
(A) Rising stock prices
(B) Declining stock prices
(C) Stable market
(D) Sudden IPOs

3. IPO stands for:
(A) Initial Public Offering
(B) Internal Price Order
(C) Investment Purchase Option
(D) International Public Operation

4. What does “dividend” mean?
(A) Interest paid to bondholders
(B) Profit distributed to shareholders
(C) Tax on securities
(D) Stockbroker’s commission

5. A company’s total market value of outstanding shares is called:
(A) Book value
(B) Market capitalization
(C) Dividend yield
(D) Equity ratio

6. “Blue-chip stocks” are:
(A) Risky stocks with low value
(B) Highly reputed, financially strong companies
(C) Government bonds
(D) Stocks of new IPO companies

7. “Liquidity” in stock markets means:
(A) Ability to pay dividends
(B) Ease of converting assets into cash
(C) Government regulations
(D) Borrowing capacity of company

8. A “stockbroker” is:
(A) Owner of stock exchange
(B) Middleman between investors and stock exchange
(C) Issuer of government bonds
(D) Regulator of market

9. “Equity” generally refers to:
(A) Ownership in a company
(B) Debt instruments
(C) Tax returns
(D) Government loans

10. What does “P/E ratio” stand for?
(A) Price to Earnings ratio
(B) Profit to Equity ratio
(C) Premium to Expense ratio
(D) Purchase to Exchange ratio

11. A “portfolio” in stock market means:
(A) A trader’s account book
(B) Collection of investments held by an investor
(C) Stock exchange records
(D) Dividend register

12. “Bonus shares” are issued to shareholders:
(A) Free of cost from company reserves
(B) At market price
(C) At premium value
(D) Through IPO only

13. A “rights issue” refers to:
(A) Issuing shares to government
(B) Issuing shares to employees only
(C) Offering shares to existing shareholders
(D) Issuing bonds to banks

14. What does “short selling” mean?
(A) Selling shares not owned by seller
(B) Buying shares for long-term
(C) Selling shares after dividend
(D) Selling bonus shares

15. “Book value” of a share means:
(A) Market value
(B) Original cost in company’s books
(C) Dividend per share
(D) Future price

16. What does “capital gain” mean?
(A) Profit earned from selling securities at higher price
(B) Dividend distributed by company
(C) Interest on debentures
(D) Tax paid to government

17. “Face value” of a share is:
(A) Value printed on the share certificate
(B) Current market price
(C) Intraday trading price
(D) Dividend value

18. What does “underwriting” mean in stock markets?
(A) Guaranteeing sale of securities in IPO
(B) Selling bonds to public
(C) Recording financial statements
(D) Declaring dividends

19. A “speculator” in the stock market is one who:
(A) Invests for long-term income
(B) Trades for short-term profit with high risk
(C) Only buys government bonds
(D) Avoids taking risks

20. “Hedging” is a strategy to:
(A) Increase speculation
(B) Minimize risk of losses
(C) Maximize dividends
(D) Avoid taxation

21. A “stock exchange index” measures:
(A) Interest rates of banks
(B) Average performance of selected stocks
(C) Dividend declared by companies
(D) Government borrowing levels

22. What does “bear squeeze” mean?
(A) Forcing sellers to cover positions by rising prices
(B) Buying government bonds
(C) Declaring bonus shares
(D) Market crash

23. A “demat account” is used for:
(A) Depositing dividends
(B) Holding shares electronically
(C) Depositing cash for trading
(D) Applying for loans

24. What does “leverage” mean?
(A) Using borrowed funds for investment
(B) Issuing rights shares
(C) Declaring dividends
(D) Investing only in IPOs

25. “Circuit breakers” in stock markets are:
(A) Safety mechanisms to halt trading during extreme volatility
(B) Bonus share declarations
(C) IPO restrictions
(D) Stop-loss orders

26. A “penny stock” is:
(A) Very expensive stock
(B) Low-priced, highly speculative stock
(C) Blue-chip stock
(D) Government bond

27. The “bid price” is:
(A) Price sellers ask for a stock
(B) Price buyers are willing to pay
(C) Average market price
(D) Price fixed by government

28. The “ask price” is:
(A) Price buyers offer
(B) Price sellers are willing to accept
(C) Government rate
(D) Stockbroker fee

29. The difference between bid and ask price is called:
(A) Spread
(B) Dividend
(C) Margin
(D) Arbitrage

30. What does “insider trading” mean?
(A) Trading based on confidential company information
(B) Trading through brokers only
(C) Buying shares for long term
(D) Government-controlled trading

31. A “growth stock” is:
(A) Stock of a company with above-average growth potential
(B) Government security
(C) Declining value stock
(D) Bonus share

32. “Yield” on a share means:
(A) Dividend expressed as percentage of market price
(B) Interest paid on bonds
(C) Increase in share capital
(D) Price difference in trading

33. “Arbitrage” is the practice of:
(A) Simultaneous buying and selling in different markets to gain profit
(B) Investing in IPOs
(C) Declaring dividends
(D) Buying shares for long-term

34. A “value stock” is:
(A) Stock traded below its intrinsic value
(B) Expensive blue-chip stock
(C) Newly issued IPO stock
(D) Government-backed stock

35. “Over-the-counter (OTC) market” deals in:
(A) Informal trading of securities not listed on stock exchange
(B) Only government securities
(C) Only IPOs
(D) Only preference shares

36. A “mutual fund” pools money from:
(A) Government loans
(B) Different investors to invest in securities
(C) Banks only
(D) Stockbrokers only

37. “Volatility” in stock market refers to:
(A) Fluctuations in stock prices
(B) Dividends declared
(C) Long-term growth
(D) Bond maturity period

38. A “derivative” is a financial instrument:
(A) Whose value is derived from another asset
(B) Issued by government only
(C) Always traded in IPO
(D) With fixed dividends

39. “Margin trading” means:
(A) Trading using borrowed money from broker
(B) Only buying government bonds
(C) Declaring company reserves
(D) Buying at market price

40. “Speculative bubble” refers to:
(A) Rapid rise in prices far above intrinsic value
(B) Decline in dividends
(C) Government restrictions
(D) Rights issue

41. What does “delisting” mean?
(A) Removal of a company’s shares from stock exchange
(B) Declaring bonus shares
(C) Launching an IPO
(D) Changing book value

42. “Secondary market” refers to:
(A) New issue of shares
(B) Trading of existing securities among investors
(C) Issuance of IPOs
(D) Only government bonds

43. “Primary market” is where:
(A) Trading of existing shares takes place
(B) New securities are issued for the first time
(C) Government bonds only are traded
(D) Brokers trade among themselves

44. A “stock split” means:
(A) Division of shares into smaller units
(B) Issuance of bonus shares
(C) Declaring dividends
(D) Repayment of bonds

45. What does “EPS” stand for in stock market?
(A) Earnings per Share
(B) Equity Price Spread
(C) Estimated Profit Share
(D) Exchange Price System

46. A “hostile takeover” means:
(A) Acquisition without consent of company’s management
(B) Voluntary merger
(C) Government acquisition
(D) Employee buyout

47. “Treasury shares” are:
(A) Shares repurchased by company itself
(B) Government-issued bonds
(C) Bonus shares
(D) Preference shares

48. “Index funds” are designed to:
(A) Replicate performance of a market index
(B) Invest only in government securities
(C) Generate fixed dividends
(D) Buy only IPOs

49. A “bear trap” occurs when:
(A) Prices rise unexpectedly after false bearish signals
(B) Market collapses suddenly
(C) Government bans trading
(D) Investors hold shares for long-term

50. A “bull trap” occurs when:
(A) Prices fall unexpectedly after false bullish signals
(B) Market rises continuously
(C) Bonus shares are declared
(D) Stop-loss orders trigger