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B Com Exam  >  B Com Tests  >  Investing in Stock Markets  >  Test: Buying and Selling of Stocks - 1 - B Com MCQ

Test: Buying and Selling of Stocks - 1 - B Com MCQ


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10 Questions MCQ Test Investing in Stock Markets - Test: Buying and Selling of Stocks - 1

Test: Buying and Selling of Stocks - 1 for B Com 2024 is part of Investing in Stock Markets preparation. The Test: Buying and Selling of Stocks - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Buying and Selling of Stocks - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Buying and Selling of Stocks - 1 below.
Solutions of Test: Buying and Selling of Stocks - 1 questions in English are available as part of our Investing in Stock Markets for B Com & Test: Buying and Selling of Stocks - 1 solutions in Hindi for Investing in Stock Markets course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Buying and Selling of Stocks - 1 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Investing in Stock Markets for B Com Exam | Download free PDF with solutions
Test: Buying and Selling of Stocks - 1 - Question 1
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What is the primary purpose of a brokerage account?

Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 1
A brokerage account allows you to buy and sell a variety of investments such as stocks, bonds, mutual funds, currency, futures, and options contracts. It provides you with access to the market and trading platforms that enable you to place orders, view metrics, and manage your investments. While some brokerages may offer additional services like financial consulting, the primary purpose of a brokerage account is to facilitate the trading of different types of investments.
Test: Buying and Selling of Stocks - 1 - Question 2
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Which type of account offers special tax benefits for retirement savings?

Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 2
An IRA (Individual Retirement Account) offers special tax benefits for retirement savings. Contributions to traditional IRAs may be tax-deductible, and the earnings within the account grow tax-deferred until withdrawal. Roth IRAs, on the other hand, allow tax-free withdrawals in retirement. These accounts are designed to help individuals save for their retirement while receiving tax advantages.
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Test: Buying and Selling of Stocks - 1 - Question 3
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What is the recommended approach for saving for a goal to be accomplished within the next five years?

Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 3
For a goal that you want to accomplish within the next five years, it is generally recommended to avoid the stock market due to its volatility. Instead, consider using an online savings account. Online savings accounts offer a safe and stable place to store your funds while earning interest. This approach minimizes the risk of losing money in the short term and ensures that your funds are readily accessible when needed.
Test: Buying and Selling of Stocks - 1 - Question 4
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What role does a robo-advisor play in investment management?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 4
A robo-advisor is a technology-driven platform that provides automated investment management services. It offers a lower-cost alternative to human investment managers by using algorithms to create and manage investment portfolios based on individual risk tolerance and financial goals. Robo-advisors are particularly popular for those who prefer a hands-off approach to managing their investments and want to benefit from automated portfolio rebalancing and asset allocation.
Test: Buying and Selling of Stocks - 1 - Question 5
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What factor should you consider when choosing an online brokerage?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 5
When choosing an online brokerage, it's important to consider factors such as the asset class you want to trade (stocks, bonds, etc.), trading fees, the capabilities of their trading platform, and other features they offer. Location and social media following are not the primary criteria for evaluating a brokerage. Your choice should be based on how well the brokerage aligns with your investment preferences and needs.
Test: Buying and Selling of Stocks - 1 - Question 6
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What is the primary purpose of a trading platform in online trading?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 6
The primary purpose of a trading platform in online trading is to facilitate various functions such as placing orders, viewing metrics, and managing accounts. It provides traders with the tools and interfaces necessary to execute trades, analyze market data, and monitor their investments. A trading platform enables users to access real-time information, charts, and other features that aid in making informed trading decisions.
Test: Buying and Selling of Stocks - 1 - Question 7
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What is the minimum requirement to open a margin account with TD Ameritrade for margin trading?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 7
To open a margin account with TD Ameritrade for margin trading, the minimum requirement is $2,000. A margin account allows traders to borrow funds from the brokerage to trade larger positions than they would with a cash account.
Test: Buying and Selling of Stocks - 1 - Question 8
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What type of account offers tax benefits through tax-deductible contributions or tax-free withdrawals?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 8
A traditional IRA (Individual Retirement Account) offers tax benefits through tax-deductible contributions. The contributions you make to a traditional IRA may be tax-deductible, which can reduce your taxable income for the year. Additionally, the earnings within the account grow tax-deferred. However, withdrawals in retirement are generally subject to income tax.
Test: Buying and Selling of Stocks - 1 - Question 9
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What should you consider when deciding how much money to invest in online trading?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 9
When starting with online trading, it's recommended to start with a smaller amount to test the waters and gain experience. The stock market can be volatile, and it's important to understand how trading works and manage risks before committing larger amounts of money. Starting small allows you to learn and adapt to the market dynamics while minimizing potential losses.
Test: Buying and Selling of Stocks - 1 - Question 10
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What role does a financial analyst play in the investment industry?
Detailed Solution for Test: Buying and Selling of Stocks - 1 - Question 10
A financial analyst plays a key role in the investment industry by analyzing financial information, macroeconomic and microeconomic conditions, and company fundamentals. Based on their analysis, financial analysts make investment recommendations to individuals, companies, or institutions. They provide insights on various investment options, sectors, and industries to guide decision-making for investment strategies.
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