Investment and Finance Quiz

What is Asset Allocation?

• A) A tax levied on profit from the sale of property or an investment

• B) Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash

• C) Profit from the sale of an asset, such as a stock or a bond

• D) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

What defines an Asset Class?

• A) A market in which prices are falling, encouraging selling

• B) A measurement of the likelihood that a bondholder will be paid back

• C) A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace

• D) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

What is a Bear Market?

• A) A market in which there is increased stock trading and rising stock prices

• B) A security in which the investor loans money to a company or government

• C) A market in which prices are falling, encouraging selling

• D) Profit from the sale of an asset, such as a stock or a bond

What is a Bond?

• A) A measurement of the likelihood that a bondholder will be paid back

• B) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

• C) A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date

• D) A tax levied on profit from the sale of property or an investment

What does Bond Rating measure?

• A) The increase in stock trading and rising stock prices

• B) The profit from the sale of an asset, such as a stock or a bond

• C) The likelihood that a bondholder will be paid back

• D) The division of an investment portfolio among different asset categories

What is a Brokerage Account?

• A) A market in which prices are falling, encouraging selling

• B) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

• C) A security in which the investor loans money to a company or government

• D) A tax levied on profit from the sale of property or an investment

What characterizes a Bull Market?

• A) A market in which prices are falling, encouraging selling

• B) A market in which there is increased stock trading and rising stock prices

• C) A measurement of the likelihood that a bondholder will be paid back

• D) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

What is Capital Gain?

• A) A tax levied on profit from the sale of property or an investment

• B) The division of an investment portfolio among different asset categories

• C) Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for

• D) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

What is Capital Gains Tax?

• A) A tax levied on profit from the sale of property or an investment

• B) The division of an investment portfolio among different asset categories

• C) Profit from the sale of an asset, such as a stock or a bond

• D) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

What is Compound Interest?

• A) A market in which prices are falling, encouraging selling

• B) An account that lets individual investors trade stocks, bonds, mutual funds, and other investments

• C) A security in which the investor loans money to a company or government

• D) Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan