Investing and Mutual Funds Quiz

What is risk in investing?

• Guarantee of profit

• Chance of losing money

• No change in value

Which type of risk involves the entire market?

• Credit Risk

• Market Risk

• Liquidity Risk

What are mutual funds?

• A type of bond

• A pool of money from many investors

• A single stock

What is the main benefit of mutual funds?

• High risk

• Diversification

• No management

What does diversification do?

• Increases risk

• Spreads risk across many investments

• Guarantees returns

Which is an example of a mutual fund type?

• Single stock

• Real estate

• Equity fund

Why is diversification important?

• Reduces risk

• Increases risk

Which brand is part of Tapestry Inc.?

• Nike

• Coach

• Apple

What should you consider when deciding to buy a stock?

• Market trends

• Friend’s opinion

• Random guess

What is one way to reduce risk in your portfolio?

• Invest all in one stock

• Diversify investments

• Ignore market trends