Stock Market and Investing Quiz

What is the main purpose of investing in the stock market?

• To avoid financial risks

• To earn a fixed income

• To preserve wealth

• To generate capital gains

Which of the following is an example of a mutual fund?

• Savings account

• Real estate property

• Index fund

• Government bond

What is the primary advantage of investing in index funds?

• Tax benefits

• Low fees

• High potential returns

• Guaranteed income

What is the purpose of diversification in investment portfolios?

• To minimize taxes

• To maximize returns

• To increase liquidity

• To reduce risk

Which of the following is a type of investment vehicle?

• Credit card

• 401(k) plan

• Student loan

• Mortgage

What is the main disadvantage of investing in individual stocks?

• Low potential returns

• Limited diversification

• No control over investments

• High fees

What is the purpose of a balanced portfolio?

• To maintain a mix of investments

• To achieve maximum growth

• To invest in high-risk assets

• To minimize taxes

What is the primary risk associated with investing in the stock market?

• Credit risk

• Market volatility risk

• Interest rate risk

• Inflation risk