Investor Genius Quiz 3

IG Basic Quiz 3

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

Which of the following best describes dividends?

They're the remainder of long division equations, and I don't want to think about that right now because math is hard.

Dividends are a percentage of a company's profits which they choose to offer to investors like me, as an incentive to hold their shares.

They are contracts which grant the right to buy or sell shares of a company at a known price, which is called the strike.

The fewer shares I hold of a company's stock, the more dividends I will receive.

True or False: Dividend strategies require a high level of regular attention from the investor, because you must change shares frequently in order to generate income.

True.

False.

Which of the following best describes growth investing?

When I invest in a company that sells products that grow from the ground, it's definitely growth investing.

Buying and holding whatever the analysts of popular finance blogs recommend as strong growers, because internet opinions can't be wrong.

Building equity through investments that grow strongly over several years (but not usually decades), and selling once the growth stagnates.

Investing in the companies that have the best-looking daily stock charts, regardless of the monthly, quarterly, and annual data.

What kind of companies would you look for when using a growth investing strategy?

Mature, well-established companies with very stable prices and not too much "buzz" about the future.

Companies that are looking to expand and have a big future, with room to grow.

Companies that have continued to lose value consistently over long periods of time.

Brand-new companies that don't have a track record, but the guys on the subway with the three-piece suits called them "can't-miss."

True or False: Growth investing has greater long-term profit potential than passive dividend investing, but the investor has to actively find the right companies and buy and sell the shares to earn income.

True.

False.

Which of the following best best describes value investing?

Buying into companies which I determine, by checking their performance data, to have greater value than their current share price shows.

Buying shares of companies I determine to be of lesser value than their current price indicates.

Buying and holding shares of companies that will give me dividend kickbacks when the company grows.

Buying shares of volatile companies when they swing to new lows, then selling at the next high irrespective of performance data.

How does the share price of a company factor into its potential as a value investment?

Only blue chip companies that cost at least $100 per share are good value investment candidates.

All companies that brought in revenue last quarter will grow in value if I just hold on long enough and hope they perform better.

The dollar amount of a company's share price is insignificant - there is investment potential if the current price is lower than what the price should be, according to my interpretation of the data.

The prices of shares I buy will always increase, because I want those profits and I'm special so I deserve them.

How can you value invest effectively, despite news and widespread emotional sentiments?

Follow the herd and sell when there are emotionally-fueled drops in the share price.

Prove, through consistent data analysis and testing, that a system of holding shares of undervalued good businesses will work for me over time - regardless of news and emotional sentiments.

If it made the news, it must be an important fact, so I should buy or sell as soon as I feel the urge.

Companies lie, cheat, and steal all the time, so the opinions of everyday people will never move the share price.

IG Basic Quiz 3

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