Investing Quiz

Investing allows you to while saving is best for

• a. Accumulate wealth; short-term purchases and emergencies

• b. Short-term purchases and emergencies; accumulate wealth

• c. Get money no matter what; long-term investments

• d. Earn between 1-2%; earning between 5-7%

What is Diversification?

• a. Creats portfolios that include multiple investments in order to reduce risk

• b. Balances risk and reward by dividing assets

• c. Combines investment money from multiple people to invest

• d. Focuses on investments that pay a fixed rate of return

What is a bond?

• a. A loan that you give to an organization

• b. Ownership in an organization

• c. Risky investments

• d. High-return investments

What is a stock?

• a. A loan that you give to an organization

• b. Ownership in an organization

• c. Safest investment

• d. Low-return investment

Which of the following statements about Mutual Funds is TRUE?

• a. All of these are correct

• b. An advantage of investing in mutual funds is that you don't have to pick individual stocks and bonds.

• c. Mutual funds that are actively managed by a fund manager are trying to 'beat the market' averages.

• d. Mutual fund managers typically charge fees of 1 - 2% on the assets they manage.

What is an Index Fund?

• a. Combines investment money from multiple people in order to invest in a diversified portfolio

• b. Invests in stocks that corresponds to a major market index

• c. Focuses on investments that pay a fixed rate of return

• d. Focuses on low-risk, low-return, highly liquid investments