Investor Genius Quiz 2

IG Basic Quiz 2

Choose the best answer from the available choices. One response must be selected for each question.

For what period of time does an investor typically aim to hold a position?

Time held is strategically related to the stock holding its value or growing, but investments are generally held for over 6 months.

No longer than two years because stocks always decrease in value after 24 months due to the "sophomore slump."

Only as long as my finanical advisor Gerald says it is good to go, because his firm will always act with my best interest at heart.

Only for shorts bursts of growth based on daily market fluctuations.

When should an investor consider selling all or a portion of an investment?

When the company represented by the stock has become unstable.

If the company changes their dividend payouts to shareholders below my acceptable level.

Because my neighbor decided to sell his shares to buy a cool new boat.

Both a and b are wise times to explore selling.

What's the primary reason the economy falters periodically, creating stock market cycles and crashes?

The economy always fails and shrinks on a regular schedule every 11.5 years.

The money supply shrinking up.

Consumer advocacy groups filing lawsuits against companies.

Census results creating a political power imbalance.

What is a simple method you can use to tell whether the economy is in a temporary dip or a longer downturn?

If my spouse shows signs of fear, I'll also feel afraid and we will immediately close all positions.

I'll know the economy is going down when I lose my job, and then I will make a plan.

If I watch the cable news channels at 2am, I'll get reliable inside information while everybody else in the market is asleep.

Using consistent, reliable indicators and raw data to assess the severity of the falling market.

How do you find good companies to invest in while the overall market is moving down?

If the overall market is going down, there can't be any good investing candidates so I'll have to wait until conditions improve.

Research the sectors that historically perform well during economic recessions, like home improvement, gambling, and entertainment.

Some companies like dollar stores do well in hard economic times so I'll use my investor tools to find companies with favorable sales performance, despite the falling markets.

Both b and c.

What's the best way to decide if a company's stock value is turning around, making it an investment opportunity?

Guess as to when the price hits its absolute bottom.

Wait until actual share prices prove to me that the company has truly turned around.

Just buy when it feels right, because it doesn't matter if I get into a stock too early or too late.

The only way to know for sure is to wait for the company executives to make insider purchases of their own stock.

How can you use simple consumer behavior patterns to find investment opportunities, regardless of inconsistency in the overall market?

Look at staple products like soft drinks and fast food, which are cheap and popular most of the time, so companies in those sectors may have more stable revenue.

Simply pay attention to which ads are airing on TV to get a general feel for what people are buying, which indicates which corporation's sales are steady.

I can keep an eye on the everyday people I come into contact with, noting which products are important for their lifestyle, then do some research to verify.

All of the above.

What information does an agile, intelligent investor use to determine the "sunrise" and "sunset" of companies, within their business life cycle?

Consumer preference shifts, which cause some companies to boom with the latest trends while others are left behind and eventually go bust when people stop buying what they offer.

A company's expenses and sales numbers, making sure they are moving in parallel.

A customized short list of stocks, pre-filtered by the data that matters for my trading strategy.

All of the above.

IG Basic Quiz 2

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