Investment Quiz

What does owning a stock represent?

• A loan to a company

• Ownership in a company

• A government bond

• A savings account

Which type of investment is generally considered the least risky?

• Stocks

• Bonds

• Real estate

• Mutual funds

What is a dividend?

• A loan repayment from the government

• The interest earned on a savings account

• A portion of a company’s profits paid to shareholders

• A tax on investments

What is the main advantage of a Junior ISA?

• Tax-free growth on investments

• Guaranteed high returns

• Can be withdrawn anytime

• Only available to retirees

What is one benefit of investing in mutual funds?

• They are managed by professionals

• They guarantee profit

• They only invest in stocks

• They are risk-free

If an 18-year-old wants to start investing with £1000, what is a key first step?

• Invest all the money in one company’s stock

• Research and diversify investments

• Take out a loan to invest more

• Spend the money on luxuries

Which of the following investment types is considered most liquid?

• Real estate

• Stocks

• Bonds

• Fixed-term savings accounts

What is an ETF?

• A type of government bond

• A fund that tracks an index and can be traded like stocks

• A type of savings account

• A cryptocurrency

Why is diversification important in investing?

• It guarantees high returns

• It helps reduce risk by spreading investments across different assets

• It ensures all investments grow at the same rate

• It is required by law

Which investment is most likely to provide passive income over time?

• Stocks

• Bonds

• Real estate (rental properties)

• A savings account