Unit 4 Quiz Intro to Investing

What is a stock?

• A type of bond issued by companies

• A share in the ownership of a company

• A mutual fund investment

• A retirement account

Which of the following is a characteristic of bonds?

• They represent ownership in a company

• They are a type of retirement account

• They are debt securities that pay interest

• They are a type of mutual fund

What is the primary purpose of the stock market?

• To provide loans to businesses

• To facilitate the buying and selling of stocks

• To manage retirement accounts

• To issue government bonds

Which of the following best describes a mutual fund?

• A single stock investment

• A collection of stocks, bonds, or other securities

• A type of bond

• A retirement savings account

What is a key difference between ETFs and mutual funds?

• ETFs can only be bought at the end of the trading day

• Mutual funds are traded on stock exchanges

• ETFs are traded like stocks throughout the day

• Mutual funds have lower fees than ETFs

Which of the following is a benefit of investing in mutual funds?

• Guaranteed returns

• Professional management

• No risk involved

• Tax-free income

Which of the following is true about a 401(k) plan?

• It is a type of bond

• It is a retirement savings plan offered by employers

• It is a government-issued savings bond

• It is a type of mutual fund

What is the main advantage of a Roth IRA over a traditional IRA?

• Contributions are tax-deductible

• Withdrawals are tax-free in retirement

• Higher contribution limits

• Employer matching contributions

What is the primary goal of a 529 account?

• To provide immediate income

• To save and invest for future retirement needs

• To buy and sell securities

• To fund future higher education expenses

Which of the following is a common feature of both mutual funds and ETFs?

• They both require a minimum investment of $10,000

• They both offer diversification

• They both guarantee returns

• They both have no fees