Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
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.
3.
A good investor ______.
Is willing to go against the crowd. The crowd is often -- but not always -- wrong.
4.
All else equal, you should be most interested in buying _______.
A wide-moat company with mediocre management. Remember, the economics of a business usually trumps the competence of management.
5.
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.
