Investment Knowledge Quiz

Which of the following best describes market capitalization?

• The total value of a company's outstanding shares

• The daily trading volume of a stock

• The company's annual revenue

• The total number of shareholders

What is diversification in investment terms?

• Buying stocks from different sectors

• Investing all money in one stable company

• Spreading investments across various asset classes to reduce risk

• Focusing on high-risk investments only

What does P/E ratio represent?

• Price to earnings per share

• Profit to expense ratio

• Portfolio efficiency ratio

• Performance to expectation ratio

Which investment vehicle is typically considered the most liquid?

• Real estate

• Cash and cash equivalents

• Corporate bonds

• Private equity

What is a bear market?

• A market where prices rise continuously

• A market showing sideways movement

• A market where prices fall at least 20% from recent highs

• A market with high trading volume

What is dollar-cost averaging?

• Converting foreign currency investments

• Investing a fixed amount at regular intervals

• Calculating average returns annually

• Measuring dollar value against other currencies

Which type of investment typically offers the highest potential returns over the long term?

• Savings accounts

• Government bonds

• Stocks

• Certificates of deposit

What is a mutual fund?

• A government savings program

• A pool of money managed by professionals investing in various securities

• A type of retirement account

• A direct stock purchase plan

What does ROI stand for?

• Risk of Investment

• Return on Investment

• Rate of Inflation

• Record of Income

Which of these is a defensive stock?

• Technology startup stock

• Cryptocurrency

• Utility company stock

• Mining company stock