Investing Quiz

What the market is called when there is a decline in stock prices

• Boom market
• Stable market
• Bear market
• Bull market

Which of the following is the safest investing strategy?

• All eggs in one basket

• Penny stocks

• diversification

• buy high sell low

This is cash or possibly more shares that a company pays to its shareholders

• Commission
• Royalty
• Interest
• Dividend

Which is the word that describes how easy it is to sell a stock?

• volatility
• stability
• inflation
• liquidity

Which answer correctly shows investments that are ordered least to most risky?

• bank account, GIC, blue chip

• penny, real estate, GIC

• ETF, mutual fund, savings account

• piggy bank, penny stocks, bonds

What is the rule to determine how many years it will take to double your investment?

• Rule of 50
• Rule of 100
• Rule of 72
• Rule of 200

A key difference between saving and investing is

• Saving and investing have the same purpose
• Saving involves risk while investing is risk-free
• Saving is for everyone while investing is for the rich

• Savings is for emergencies and goals, investing is for long term wealth

Why is compound interest more beneficial than simple interest?

• Simple interest provides higher returns in the long run.
• Compound interest does not consider the initial principal amount.
• Simple interest is calculated more frequently than compound interest.
• Compound interest considers interest on interest, leading to higher returns.

The relationship between risk and return can be stated as

• Higher risk is associated with higher potential returns.
• Lower risk is associated with higher potential returns.
• Higher risk is associated with lower potential returns.
• Risk and return are not related.

If interest rates rise, what will typically happen to bond prices?

• Bond prices will remain the same
• Bond prices will typically decrease
• Bond prices will typically increase
• Bond prices will be unaffected by interest rates