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Investing Quiz

Total questions: 15

Worksheet time: 8mins

Name
Class
Date
1.

The most common relationship between risk and return in investing can be state as:

a)

Higher risk indicates lower return

b)

Higher risk indicates higher return

2.

It is best to have a rate of return on an investment that is ______ than the rate of inflation _______.

a)

Lower; to minimize taxes

b)

Higher; to maintain purchasing power

3.

A(n) _______ investor is one who is not willing to take many risks in their investments.

a)

Speculative

b)

Conservative

4.

Which of the following is not true in regards to investing in stock?

a)

A stockholder may or may not receive a dividend.

b)

A stockholder will always receive a profit when the stock is sold.

5.

If you invest in stocks with the hope that the value of the shares will increase over time, you would be more likely to invest in ________.

a)

Growth stock

b)

Common stock

6.

The first electronic stock exchange was the _________.

a)

Dow Jones Industrial Average

b)

New York Stock Exchange

c)

NASDAQ

d)

S&P 500

7.

A person who is licensed to buy and sell stocks on behalf of others, provide investment advice, and collect a commission on each purchase or sale is called a __________.

a)

Bank clerk

b)

Accountant

c)

Stock Broker

d)

Retail Investor

8.

This index is a weighted average of 30 different blue chip stocks traded on the New York Stock Exchange is known as the ____________.

a)

Standard and Poor’s 500

b)

Dow Jones Industrial Average

c)

Fortune 1000

d)

Bond Index

9.

The Standard and Poor’s 500 index increases in value an average of _____% each year.

a)

3%

b)

8%

c)

10%

d)

14%

10.

When a private company wishes to raise capital to expand, it can issue shares to the public through a process called

a)

Stock buy-back

b)

Liquidating assets

c)

Mergers and acquisitions

d)

Initial public offering (IPO)

11.

A company that is not publicly traded is said to be ________.

a)

Private

b)

Public

c)

Bonded

d)

Aggressive

12.

A bond is a _________.

a)

Type of debt that a company issues to investors for a specified period of time

b)

Share of ownership in a company

13.

Mutual funds are ______.

a)

Speculative investments that are managed without fees

b)

Diversified investments comprised of a variety of stocks and bonds

14.

A company needs to raise cash to expand, but it does not want to issue stock. A company can raise cash by selling _________ and paying interest.

a)

Bonds

b)

Contracts

15.

A(n) _______ is a group of companies producing a similar product or service.

a)

Franchise

b)

Mutual fund

c)

Industry

d)

Competitor