Stocks & Investments Quiz Review

To minimize the risk of stock investing, an investor may choose to own a portfolio consisting of shares of stock from various companies in different industries. This strategy is known as:

• options trading
• diversification
• trading at a discount
• tax sheltering

Which one of the following investment vehicles has the highest risk?

• stocks
• bonds
• money market accounts
• savings accounts

An investor seeking ownership in a public corporation would be interested in investing in:

• bonds
• treasury notes
• common stock
• commodities

True or False. Investment in stocks has the potential for greater returns in exchange for assuming greater risk.

• True
• False
• It depends

When an investor lends money to a corporation or the government, he/she purchases:

• futures
• stocks
• options
• bonds

Which of the following statements is true abut the advantage of buying mutual funds?

• they contain a large portion of cash in their portfolio
• mutual funds are guaranteed against loss
• they are complicated to purchase, so day traders avoid them
• they provide immediate diversification and asset allocation to the investor

Investment by a large number of individual investors in a company which can invest their money more efficiently than the individual investors could do on their own is called investment in a:

• stock
• gold share
• mutual fund
• commodity exchange

A security that represents ownership in a public corporation

• asset
• bond
• common stock
• mutual fund

The redemption value of a bond appearing on the face of the certificate.

• call risk
• index
• face value (par)
• bond premium

A prolonged period during which stock prices are falling in value.

• bear market
• bull market
• market value
• market trend