WorksheetsPersonal Finance - Investing Quiz
Total questions: 20
Worksheet time: 27mins
Match the following types of investments with their explanation
Stocks
represents a fraction of the ownership of the issuing corporation
Bonds
essentially loans to a corporation or governmental body
Mutual Funds
allows you to invest in all three categories of investments with a smaller amount of money
Cash Alternatives
Includes savings accounts, money markets, CDs, guaranteed investment contracts, etc
(a) entitles the owner to vote at shareholders' meetings.
(a) does not have voting rights
(a) has a higher claim on assets and earnings than (b)
Order the following investments from highest risk to least risk.
Stock
Bonds
Cash Alternatives
The price of stock is decided by the executives of the company.
True
False
Which of the following are ADVANTAGES of investing in stocks. Mark all that apply
Easy to buy and sell
Subject to market volatility
Greater risk to principal
Can provide capital appreciation as well as income from dividends
Income from them is tax exempt
Where are stocks bought and sold?
stock exchange
bank
internet
financial advisors office
Where could you go if you were interested in purchasing stocks to set up a brokerage account? Mark all that apply.
stock exchange
bank
internet
financial advisors office
What are the two ways that you can earn money from stocks?
______companies are companies that are reinvesting their profits back into the business.
Growth
Income
______companies are companies that are more likely to pay out their profits to investors as opposed to reinvesting in the company.
Growth
Income
Identify the ADVANTAGES of bonds. Mark all that apply.
Provide a predictable stream of income
Typically higher income return than cash
Values fluctuate with interest rates
Risk of default if business goes under
If a business goes bankrupt, order the following investors in the order they would receive payments
Bond holders
Preferred Stockholders
Common Stockholders
Why are bonds one of the main investments of retired people?
Earnings on bonds are sometimes tax-exempt.
True
False
Mutual funds are always a safe investment
True
False
You will have to pay a fee if you invest in mutual funds
True
False
If you were to decide to invest some of your money at this point in your life, which type of investment would you choose and why?
Should someone really close to retirement age invest all of their savings in stocks? Why?
