Investing Unit Exam Review

A stock represents partial ownership in a company.

• True

• False

Bonds are generally riskier than stocks.

• True

• False

A mutual fund pools money from many investors to buy a diversified portfolio of stocks or bonds.

• True

• False

Diversification helps reduce the overall risk of an investment portfolio.

• True

• False

The stock market always increases in value over short periods of time.

• True

• False

A dividend is a payment made by a company to its shareholders.

• True

• False

Investing is typically used for short-term financial goals.

• True

• False

A stock index tracks the performance of a group of companies.

• True

• False

An ETF (Exchange-Traded Fund) trades on the stock market like an individual stock.

• True

• False

A 401(k) is a retirement account offered by employers.

• True

• False