6. What does the term “liquidity” mean in the context of the capital market?
a) The ability to easily buy or sell assets without impacting their prices
b) The profitability of a company
c) The total value of all assets held by a company
d) The risk associated with investing in a particular stock
7. What is a “stock index”?
a) A measure of the overall performance of a stock market or a specific sector
b) The price of a single stock listed on an exchange
c) The total value of all shares outstanding in a company
d) The average price of a basket of commodities
8. What does the term “market capitalization” refer to?
a) The total value of all shares outstanding in a company
b) The annual revenue generated by a company
c) The total debt owed by a company
d) The amount of capital a company can raise from the market
9. What is a “derivative” in the capital market?
a) A financial instrument whose value is derived from another underlying asset
b) A low-risk investment option
c) A type of bond issued by the government
d) A short-term loan provided by banks to companies
10. What is the “bid-ask spread” in the capital market?
a) The difference between the highest and lowest bid prices for a security
b) The interest rate charged by a bank on loans provided to companies
c) The annual dividend yield of a stock
d) The trading volume of a specific stock
