Investing Quiz

The most common relationship between risk and return in investing can be state as:

• Higher risk indicates lower return

• Higher risk indicates higher return

It is best to have a rate of return on an investment that is ______ than the rate of inflation _______.

• Lower; to minimize taxes

• Higher; to maintain purchasing power

A(n) _______ investor is one who is not willing to take many risks in their investments.

• Speculative

• Conservative

Which of the following is not true in regards to investing in stock?

• A stockholder may or may not receive a dividend.

• A stockholder will always receive a profit when the stock is sold.

If you invest in stocks with the hope that the value of the shares will increase over time, you would be more likely to invest in ________.

• Growth stock

• Common stock

The first electronic stock exchange was the _________.

• Dow Jones Industrial Average

• New York Stock Exchange

• NASDAQ

• S&P 500

A person who is licensed to buy and sell stocks on behalf of others, provide investment advice, and collect a commission on each purchase or sale is called a __________.

• Bank clerk

• Accountant

• Stock Broker

• Retail Investor

This index is a weighted average of 30 different blue chip stocks traded on the New York Stock Exchange is known as the ____________.

• Standard and Poor’s 500

• Dow Jones Industrial Average

• Fortune 1000

• Bond Index

The Standard and Poor’s 500 index increases in value an average of _____% each year.

• 3%

• 8%

• 10%

• 14%

When a private company wishes to raise capital to expand, it can issue shares to the public through a process called

• Stock buy-back

• Liquidating assets

• Mergers and acquisitions

• Initial public offering (IPO)