Megan Decided to Start Investing in Stocks

question 87

Multiple Choice

Megan decided to start investing in stocks. Which of the following should she do first?

• A) Base her investing decisions on hot tips she hears at work.
• B) Buy stocks based solely on her stockbroker's recommendation.
• C) Choose stocks based on recommendations from her family members.
• D) Pick stocks at random.
• E) Research the corporations she is interested in as well as their industries.

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Definitions:

Minimum Cash Balance

The lowest amount of cash that a company aims to maintain in its accounts to adequately meet its operational and financial obligations.

Borrowing

The act of obtaining funds from a lender under the agreement to pay back the principal amount along with interest or other charges.

Inventory Levels

The quantities of goods and materials a company holds for the purpose of resale or production at any given point in time.

Raw Material

The basic, unprocessed inputs used in the production of goods, often transformed through manufacturing processes into finished products.