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WorksheetsChapter 6 Quiz - Investing
Total questions: 25
Worksheet time: 13mins
Spreading risk by putting money in different types of investments is known as _____.
dollar-cost averaging
diversification
risk tolerance
variation
An increase in the value of an investment is called _____.
inflation
net asset value (NAV)
appreciation
yield
An overall rise in prices is called _____.
a yield
volatility
a dividend
inflation
Which type of investment provides an individual with voting rights and receives dividends when declared by the company?
mutual fund
preferred stock
bond
common stock
In which market does a company’s initial public offering (IPO) occur?
primary
secondary
OTC
investment club
In which market do investors purchase securities from other investors rather than from the issuing company?
primary
secondary
IPO
new-issues
What is a certificate of debt issued by a corporation or government?
stock
bond
mutual fund
dividend
Which type of investment is created by pooling the money of many people and investing it in a collection of securities?
common stock
mutual fund
corporate bond
investment club
Which of the following type of valuable goods can be considered an investment?
gemstones
previous metals
collectibles
All of the above.
Investing a fixed dollar amount at regular intervals without regard to the price of the investment at the time you buy it is _____.
buy-and-hold investing
a dividend reinvestment plan (DRIP)
dollar-cost averaging
net asset value investing
An extended period of falling stock prices is a bull market.
True
False
An extended period of rising stock prices is a bear market.
True
False
Purchasing shares in a Real Estate Investment Trust (REIT) is a way to personally buy and own rental property.
True
False
Factors that investments should be characterized by include: Degree of volatility, rate of return, risk, and liquidity.
True
False
To beat inflation, the rate of return that you must earn on an investment needs to be lower than the rate of inflation.
True
False
A tax-deferred investment is one where no taxes are paid as the investment earns income and grows in value.
True
Value
A prospectus is a short-term debt with a maturity ranging from a few days to 52 weeks.
True
False
A dividend reinvestment plan (DRIP) allows investors to reinvest cash dividends by purchasing additional shares of stock.
True
False
A securities exchange is where art dealers go to sell their paintings to investors.
True
False
When shares of stock are bought or sold, this is called a stock trade.
True
False
The price volatility of bitcoin is high when compared to most blue chip or large cap stocks.
True
False
The definition of investing is to sell anything of value over time.
True
False
If you buy a share of stock in a corporation, you then have ownership in that corporation.
True
False
Level of Risk is defined by the degree to which an investment may deviate from its rate of return.
True
False
Risk Tolerance has nothing to do with the amount of uncertainty a person is willing to handle.
True
False
