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WorksheetsBF05 Unit 5.03 Investments Quiz
Total questions: 10
Worksheet time: 5mins
Name
Class
Date
1.
The most common relationship between risk and return in investing can be stated as:
a)
higher risk indicates lower return.
b)
higher risk indicates higher return.
c)
lower risk indicates higher return.
d)
no relationship exists between risk and return.
2.
Which is not true with regard to investing in stock?
a)
A stockholder may or may not receive a dividend.
b)
A stockholder owns a part of a company.
c)
Depending upon the current market price, stockholders may pay different prices for the same stock.
d)
A stockholder will always receive a profit when the stock is sold.
3.
In relation to the rate of inflation, it is best to have the rate of return on an investment:
a)
lower, in order to minimize taxes.
b)
lower, in order to minimize risk.
c)
higher, to maintain purchasing power.
d)
higher, to minimize risk.
4.
Alisa is looking for an investment that is structured to have tax benefits. She should look for information on:
a)
tax-rated bonds.
b)
speculative investments.
c)
index funds.
d)
tax-advantaged investments.
5.
Conner wants to purchase stocks with the money he received from his tax return. Who would he contact to make the transaction?
a)
A brokerage firm
b)
The New York Stock Exchange
c)
A real estate agent
d)
Conner should complete this transaction on his own.
6.
Elliot’s stock broker is suggesting that he consider investing in a diversified portfolio. A diversified portfolio is desirable because it:
a)
increases the risk/return ratio.
b)
limits investor choices to only one or two investment tools.
c)
indicates an investor is a good predictor of the return an investment will have.
d)
decreases risk by investing money in a variety of investment tools.
7.
A bond is:
a)
a type of debt that a company issues to investors for a specified period of time.
b)
a share of ownership in a company.
c)
a type of investment that is only offered by depository institutions.
d)
a type of investment that has the potential for significant fluctuations over a short period of time.
8.
Which statement is true of mutual funds?
a)
Mutual funds are speculative investments.
b)
Mutual funds are diversified investments.
c)
Mutual funds are a form of real estate investment.
d)
Mutual funds are superior purchasing to a single stock.
9.
Harris is concerned about the effects of inflation on his investment returns. Which statement best describes inflation?
a)
The rise in the general level of prices
b)
The uncertainty about the return on an investment
c)
The number of times something happens to money
d)
The projected value of an investment at the end of a specified time frame
10.
Which statement is true with regard to paying taxes on investments?
a)
Since investments are considered unearned income, taxes do not have to be paid on earnings.
b)
Taxes are often owed on profits generated from investments.
c)
Taxes only have to be paid on employer-sponsored investment accounts.
d)
Taxes are always paid on investments either when the money is placed in the investment or removed from the investment.
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