Investing Basics: Stocks and Bonds Quiz

• 10%

• 20%

• 15%

• 25%

Tags

CCSS.8.EE.C.7B

• 5%

• 5.5%

• 6%

• 7%

Tags

CCSS.8.EE.C.7B

Which of the following best describes a mutual fund?

• A loan to a company or government

• Ownership in a single company

• A pool of funds invested in various securities

• A type of insurance

If a mutual fund has an average annual return of 8% and the risk-free rate is 2%, what is the fund’s risk premium?

• 6%

• 8%

• 2%

• 10%

Tags

CCSS.HSS.MD.A.2

Which investment typically has the highest risk and potential return?

• Government bonds

• Savings accounts

• Stocks

• Certificates of deposit

If the price of a bond increases, what generally happens to its yield?

• Yield increases

• Yield decreases

• Yield stays the same

• Yield becomes negative

A mutual fund’s expense ratio is 1.5%. What does this mean?

• The fund charges 1.5% of your profits

• The fund charges 1.5% of your investment annually

• The fund charges 1.5% only when you sell

• The fund charges 1.5% as a one-time fee

Tags

CCSS.6.RP.A.3C

Which of the following is a sign of a bear market?

• Stock prices are rising

• Stock prices are falling

• Bond yields are decreasing

• Mutual funds are outperforming

• 0.2%

• 2%

• 20%

• 5%

Which of the following best describes diversification?

• Investing all your money in one stock

• Spreading investments across different assets

• Buying only government bonds

• Investing only in real estate

Tags

CCSS.HSS.MD.B.6

CCSS.HSS.MD.B.7