Finding winner stocks - Quiz

Lesson 8 – Finding winners

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According to Warren Buffet, what is one straightforward method of identifying potential investment opportunities?

Reading financial news daily

Buying companies whose products and services he uses himself regularly

Following trends in the stock market

Investing in tech startups

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What is a consumer monopoly?

A business that has exclusive control over a product or service in the market

A government regulation to control consumer behavior

A consumer behavior survey

A marketing strategy for promoting a product or service

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How can temporary bad news lead to good investment opportunities?

It discourages competitors

It gives the company a chance to improve its services

It can result in the company’s stock selling at a discount

It makes the company more newsworthy

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What is a vital quality needed for a successful investment strategy according to Warren Buffet?

Aggression

Impatience

Observation

Predictability

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Why do investors need to be cautious about the cost of stocks?

Because the quality of a company and its stock price are not always directly correlated

Because high-cost stocks always yield high returns

Because low-cost stocks are always risky

Because the cost of stocks is irrelevant to their potential returns

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What does an “easy target” look like in the investing world?

A new startup with a groundbreaking product

A company that is going bankrupt

A solid company that has been temporarily hit by bad news

A company that is investing heavily in marketing

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Why is it important to identify a change in trend when making investment decisions?

Because a change in trend could indicate a good time to enter or exit the market

Because trends determine the overall performance of the stock market

Because trends indicate the financial stability of a company

Because following trends is a popular investment strategy

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How can good news create investment opportunities?

It creates a positive sentiment around the company, which may increase its stock price

It brings attention to the company, leading to more investors

It shows the company has a successful public relations team

It has no direct impact on investment opportunities

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What is stock screening?

A process of identifying potential investment opportunities by applying specific criteria

A method of monitoring the performance of a company

A strategy for predicting future trends in the stock market

A way to determine the intrinsic value of a stock

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What is Return on Equity (ROE)?

The amount of profit a company makes in a year

A measurement of a corporation’s profitability revealing how much profit a company generates with the money shareholders have invested

The ratio of a company’s annual sales to its equity

The percentage of a company’s equity invested in stocks

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What does the PEG Ratio account for that the PE Ratio does not?

The company’s share price

The company’s expected earnings growth rate

The company’s net profit

The company’s annual revenue

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How can an investor further filter their list of potential investments after applying a stock screener?

By checking if the company’s products are in high demand

By applying technical criteria such as checking if the price is above the 200-day moving average

By assessing the company’s marketing strategies

By predicting future trends in the company’s sector

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How does a company with consistent sales growth over the last five years indicate potential as an investment?

It suggests a higher share price

It guarantees a higher return on investment

It suggests stability and a proven business model

It indicates that the company is expanding its market share

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Why should investors analyze the five-year charts of potential investments?

To understand the historical performance of the company’s stock

To identify companies with clear, consistent uptrends

To predict future trends in the stock market

To assess the company’s financial health

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