Investments Unit – Multiple Choice Exam

Front

What is the primary reason people invest money?

Back

To grow their wealth over time

Front

Which of the following is considered the safest type of investment? Stocks, Corporate bonds, Savings account, Mutual funds

Back

Savings account

Front

What does “diversification” mean in investing?

Back

Spreading your money across different types of investments

Front

True or False: A high-risk investment always guarantees high returns.

Back

False

Front

What is a stock?

Back

A share of ownership in a company

Front

Which of these investment types generally has the highest potential return over the long term?
Options: Certificates of deposit (CDs), Government bonds, Real estate, Stocks

Back

Stocks

Front

Which investing strategy is focused on holding investments long-term to benefit from growth over time?

Back

Buy and hold

Front

What is the main purpose of a mutual fund?

Back

To pool money from many investors into a managed portfolio

Front

True or False: Bonds are riskier than stocks.

Back

False

Front

You invest $1,000 in a stock that gains 8% over a year. How much is your investment worth now?

Back

$1,080