Investment Vocabulary Quiz

What is a bond?

• A loan to a company or government

• A share of ownership in a company

• A type of real estate

• A high-risk investment

What does a brokerage firm do?

• Facilitates buying and selling of investments

• Manages real estate properties

• Only offers financial advice

• Issues bonds to investors

What is capital gain?

• Profit from selling an asset above purchase price

• A fee paid to a brokerage firm

• Money lost due to inflation

• Money earned from dividends

How is a discount brokerage firm different from a full-service brokerage firm?

• It only completes buy/sell orders, no advice

• It requires higher fees but provides full service

• It only handles real estate investments

• It does not allow stock market trading

What are dividends?

• Payments made to stockholders from company profits

• Fees charged by a brokerage firm

• Money lost from a bad investment

• Another term for capital gains

Who helps people make investing decisions?

• Financial advisor

• Real estate agent

• Loan officer

• Tax consultant

What does a full-service brokerage firm offer?

• Investment transactions, advice, and financial planning

• Only investment transactions, no advice

• Only tax planning services

• Only real estate investments

What is an index?

• A group of similar stocks and bonds

• A record of stock market failures

• A company that sells stocks

• A government program for investors

What is an index fund?

• A mutual fund investing in stocks/bonds from an index

• A type of bond that increases with inflation

• A risky investment with high returns

• A personal stock portfolio

What is inflation?

• The rise in the general level of prices

• A tax penalty for investors

• A decline in stock market prices

• A type of real estate investment