Choose wisely. There is only one correct answer to each question.
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1.
A patient stock investor watches her _______ most of all.
Companies. A patient investor pays attention to the companies that issue the stock. Watching stock prices is less helpful.
2.
If a company you are investing in reports a nice big surprise, what can you expect?
There will be more surprises. Its not a sure thing, but you can expect more surprises, as there is likely to be a trend going on.
3.
Which of the following activities is most likely to improve your investing skills?
Reading one of your companys annual reports. Reading annual reports will help you know more about your companies, which will make you a better investor. By constantly looking at unrealized capital gains, you may be anchoring on an irrelevant data point--the price you paid--concerning the future value of a stock.
4.
Past performance is sometimes a good _______ of future results.
Indicator. Though past performance is not a guarantee of future results, it can still be a good indicator of good results. Still, do your homework.
5.
The stock of a company that is in great shape financially will always be priced accurately.
False. Though that is the ideal, a stocks price is sometimes higher or lower than what is accurate (that is, what its book value is).
