Investing NGPF

What is a common strategy to minimize investment risk?

• Focusing solely on short-term gains

• Diversifying across different asset classes

• Ignoring market trends

• Investing all money in a single stock

Which of the following is a characteristic of dollar-cost averaging?

• Dollar-cost averaging is a way to decrease your risk

• Dollar-cost averaging is a strategy that only expert investors use

• Dollar-cost averaging is advantageous because earnings are untaxed

• Dollar-cost averaging is offered exclusively through robo-advisors

If interest rates rise, what will typically happen to bond prices?

• Rise

• Fall

• Stay the same

What is a key advantage of investing in mutual funds?

• They are risk-free

• They have no fees

• They offer guaranteed returns

• They are managed by professionals

The relationship between risk and return can be stated as

• Higher risk indicates higher return

• Higher risk indicates lower return

• Lower risk indicates higher return

• No relationship exists between risk and return

Which is NOT a stock market index?

• Russell 2000

• Amazon

• S&P 500

• Nasdaq

Which of the following is a benefit of starting to invest early?

• Guaranteed profits

• Lower investment fees

• More time for compound growth

• Higher short-term gains

Which of the following is a characteristic of a mutual fund?

• It is managed by a professional

• It is a type of bond

• It guarantees a fixed return

• It requires no fees

Why is it important to start investing as soon as possible?

• You take less risk when you are young, so money will be safe

• You have more time for your money to compound

• Investing is an easy way to make quick money

• Fees on investments are cheaper when you are younger

Which of the following is a characteristic of a bond?

• High volatility

• Ownership in a company

• Unlimited growth potential

• Fixed interest payments