IBKR Interactive Brokers Stock Teaching Exam
Posted: Thu Jan 09, 2025 10:45 am
If you are long 100 shares of XYZ stock, what would be your position if you sold the 100 shares of XYZ stock?
You would be short 100 shares
You would be flat (you have 0 shares)
You would be long 200 shares
Owning stock in a company means that:
You have acquired an ownership stake in the company
You have made a loan to the company
Both
In order to sell a stock, you must first be a registered owner of the same stock.
True
False
What is a dividend?
A sum of money paid by a company to its shareholders
A bonus paid to the Board of Directors of a publicly-traded company by investors
Shares of stock that are borrowed in return for compensation
None of the above.
If a you sell a stock short, what are you hoping will happen to the stock price?
You are hoping the price will increase
You are hoping the price will decrease
You are hoping the price will stay the same
In the previous question about shorting stock, why would you want the stock price to decrease?
So that you could buy the stock back at a lower price
So that you could sell more stock at a lower price to a friend
To maximize the dividend you would receive
Should a sell stop order be placed above or below the current market price?
Above
Below
Neither, it should be placed at market
The primary difference between a market order and a limit order is:
A market order can only be entered on a U.S. registered market center
A limit order permits the user to identify the highest amount they will pay to buy a stock, or the lowest amount they will accept to sell a stock
Only market orders are permitted when placing an order to execute at the open
Market orders are less likely to receive an execution than limit orders
Which is typically considered the riskiest type of investment out of the choices below?
Common Stock
Preferred Stock
Penny Stock
Blue Chip Stock
Which of the following is NOT a risk of trading outside regular trading hours?
Risk of Lower Liquidity
Risk of Congested Markets
Risk of Higher Volatility
Risk of Wider Spreads
What does it mean to trade stocks on margin?
You are purchasing stocks with enough cash in the bank to cover the purchase price.
You are selling stocks and have already accounted for how the proceeds will be used.
You are purchasing stocks where the purchase price is partially covered by a loan from your brokerage firm.
You are purchasing stocks where the purchase price is partially covered by a loan from a personal connection.
An investor can only profit in a bull market.
True
False
If you have a position in a dividend paying stock, what happens to the price of that stock if the stock goes ex- dividend?
Increase
Decrease
Neither
If you sell a stock for a profit but the exchange then busts your trade, you are entitled to the profit you would have received if the exchange had not busted the trade.
True
False
You would be short 100 shares
You would be flat (you have 0 shares)
You would be long 200 shares
Owning stock in a company means that:
You have acquired an ownership stake in the company
You have made a loan to the company
Both
In order to sell a stock, you must first be a registered owner of the same stock.
True
False
What is a dividend?
A sum of money paid by a company to its shareholders
A bonus paid to the Board of Directors of a publicly-traded company by investors
Shares of stock that are borrowed in return for compensation
None of the above.
If a you sell a stock short, what are you hoping will happen to the stock price?
You are hoping the price will increase
You are hoping the price will decrease
You are hoping the price will stay the same
In the previous question about shorting stock, why would you want the stock price to decrease?
So that you could buy the stock back at a lower price
So that you could sell more stock at a lower price to a friend
To maximize the dividend you would receive
Should a sell stop order be placed above or below the current market price?
Above
Below
Neither, it should be placed at market
The primary difference between a market order and a limit order is:
A market order can only be entered on a U.S. registered market center
A limit order permits the user to identify the highest amount they will pay to buy a stock, or the lowest amount they will accept to sell a stock
Only market orders are permitted when placing an order to execute at the open
Market orders are less likely to receive an execution than limit orders
Which is typically considered the riskiest type of investment out of the choices below?
Common Stock
Preferred Stock
Penny Stock
Blue Chip Stock
Which of the following is NOT a risk of trading outside regular trading hours?
Risk of Lower Liquidity
Risk of Congested Markets
Risk of Higher Volatility
Risk of Wider Spreads
What does it mean to trade stocks on margin?
You are purchasing stocks with enough cash in the bank to cover the purchase price.
You are selling stocks and have already accounted for how the proceeds will be used.
You are purchasing stocks where the purchase price is partially covered by a loan from your brokerage firm.
You are purchasing stocks where the purchase price is partially covered by a loan from a personal connection.
An investor can only profit in a bull market.
True
False
If you have a position in a dividend paying stock, what happens to the price of that stock if the stock goes ex- dividend?
Increase
Decrease
Neither
If you sell a stock for a profit but the exchange then busts your trade, you are entitled to the profit you would have received if the exchange had not busted the trade.
True
False