Investing Test Review

Select the $1,000 investment that will earn the most money over one year.

• 7% rate of return, compounded annually
• 5% rate of return, compounded bi-annually
• 3% rate of return, compounded monthly
• 2% rate of return, compounded daily

At age 35 you invest $1,000 in a mutual fund that earns 9% annually. How much will your original investment be worth at age 62? 

• $4,000
• $12,000
• $16,000
• $32,000

As a 60 year old retiree, which asset is the greatest liquidity risk? 

• Savings account
• Stock in a 401k
• Checking account
• Rental property

As a 25 year old, which asset is the greatest liquidity risk? 

• Savings account
• Stock in a 401k
• Checking account
• Rental property

Select the most diversified asset.

• Stock
• Bond
• Mutual fund
• Rental property

Select the investment that has historically had the greatest returns over time.

• Stock
• Bond
• Mutual fund
• Savings account

You purchase a US Treasury bill because you want a safe investment. Who did you just loan money to? 

• State Treasurer
• U.S. Federal Government
• Ohio government
• Reading

You are systematically purchasing $100 worth of mutual funds each month. What is the investing strategy called?

• Dollar cost averaging
• Dividend reinvestment
• Short selling
• None of the above

I a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so. Who am I? 

• Employee with a large company
• Fortune 500 CEO
• Teacher
• Entrepreneur

Money pooled together by a professional to purchase stocks, bonds, or cash to manage money toward a stated goal. What am I?

• ETF
• Mutual fund
• Bond
• Stock