Investing Knowledge Quiz

What is investing?

• Spending money on daily needs

• Using short-term savings for quick profits

• Using long-term savings to earn a financial return

• Keeping money in a checking account

Why is diversification important in investing?

• It guarantees you won't lose money

• It spreads risk among different types of investments

• It focuses all investments in one area

• It eliminates the need for research

Which market indicator tracks 30 important companies?

• NASDAQ

• The Dow Jones Industrial Average

• S&P 500

• Russell 2000

What is a bond?

• A type of stock investment

• A debt security that may pay interest

• A mutual fund investment

• A real estate investment

Why do people invest in stocks?

• They are completely risk-free

• They provide ownership in a corporation

• They always guarantee returns

• They only require small investments

What is a stockbroker?

• Someone who owns all company stocks

• A person who manages the stock exchange

• Someone who buys and sells stocks for a commission

• A company employee who gives away stocks

What is the NYSE?

• A new type of investment

• A computer program for trading

• The oldest organized stock exchange in the U.S.

• A government agency

What are dividends?

• The total value of a company

• Payments made by a corporation to shareholders

• Money paid to stockbrokers

• The cost of buying stocks

Which type of investment is considered low risk/low return?

• Penny stocks

• Bonds

• Options

• Futures

What is a mutual fund?

• A single company stock

• A government bond

• Pooled money from investors to buy various securities

• A personal savings account