Ready to challenge your financial savvy? Let's dive into the world of stocks!

What is the primary purpose of a stock exchange?

A stock exchange facilitates the buying and selling of stocks, providing a marketplace for investors.

Which financial instrument represents ownership in a company?

Stocks represent ownership in a company, entitling shareholders to a portion of profits.

What does it mean to 'short sell' a stock?

Short selling involves selling borrowed shares, aiming to buy them back at a lower price for a profit.

How does diversification reduce investment risk?

Diversification reduces investment risk by spreading investments across various assets, minimizing the impact of any single underperforming asset.

What is a dividend in terms of stock investments?

A dividend is a portion of a company's profits distributed to shareholders, typically as cash or additional shares.