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Worksheets

Investments

Total questions: 49

Worksheet time: 24mins

Name
Class
Date
1.

What is a mutual fund ?

a)

connection between stock broker and buyer

b)

a connection between a company and the buyers that allows them to sell stocks

c)

a bank account that has multiple users and all are allowed to spend money

d)

an investment fund set up by the company that receives money from many investors

2.

Great for emergency funds due to their liquidity and stability

a)

Savings Accounts

b)

CD's - Certificate of Deposits

c)

Retirement Account

d)

Brokerage Account

3.
Saving and investing have nothing to do with the amount of money you make.
a)
True
b)
False
4.

You can start investing with a small amount of money.

a)

True

b)

False

5.

Which would be considered the highest risk investment type?

a)

stock

b)

mutual fund

c)

bond

d)

money market fund

6.

What is the chief reason corporations issue stock?

a)

To raise money for the corporation

b)

To give consumers ownership in the company

c)

To secure tax advantages

d)

To help the economy

7.

When John bought a Microsoft bond, he was:

a)

borrowing money from Microsoft

b)

Buying part ownership of Microsoft

c)

Investing in a liquid instrument

d)

Lending money to Microsoft

8.

What is a good habit to develop as a young adult?

a)

Attending Parties with Friends

b)

Saving money with every paycheck

c)

Borrowing money for emergencies

d)

Living Paycheck to Paycheck

9.

What determines the amount of money you can gain or lose in Investing?

a)

Principal Deposit

b)

Interest Rates

c)

Payments to Checking Account

d)

How much you Save each paycheck

10.

What is the indicator that shows your Investment is losing or gaining money in your portfolio?

a)

Checkbook balance

b)

Stock Market

c)

Bank Withdrawals

d)

Daily Purchases

11.

Which of these is associated with Investing in a Stock?

a)

Risk

b)

Where you Work

c)

Taxes

d)

Purchasing a Car

12.
Which of the following statements are true?
a)
Between cash, stocks, and bonds, bonds are typically considered the riskiest.
b)
Stocks are the riskiest investments out there.
c)
Putting money into a savings account with interest is the ideal way for a young adult to invest.
d)
Historically, stocks have had far greater annual returns than cash, government bonds, and savings
13.

Which of the following statements defines portfolio?

a)

A. Ownership of a company which enacts rights and responsibilities

b)

B. Cash or financing provided for the growth of a particular business

c)

C. Collection of investments on marketable or nonmarketable securities

d)

D. Market for trading of company stocks at an agreed price

14.

Which of the following terms describes the leftover amount when liabilities or debts are subtracted from the assets owned?

a)

A. Portfolio

b)

B. Trades

c)

C. Net worth

d)

D. Bonds

15.

Nancy, who is 60 years old, is changing her investment portfolio to one with less risk than she has had in the past. She is putting most of her money in cash investments such as money market funds and certificates of deposit. Which of the following best describes this scenario?

a)

A. Low risk

b)

B. Limited risk

c)

C. Moderate risk

d)

D. High risk

16.

If you buy 200 shares of a company’s stock which pays $1.50 per share in dividends each year, how much money will you earn in the first year in dividends only?

a)

$300

b)

$150

c)

$500

d)

$250

17.

If you purchase a bond with a face value of $1000 at a 10 percent discount, how much will you pay for the bond?

a)

$900

b)

$1500

c)

$600

d)

$990

18.

Which of the following is a corporate bond which is simply secured or “backed” by the general credit of the corporation?

a)

A. Debenture bond

b)

B. Asset-backed bond

c)

C. General review bond D. Fixed bond

d)

D. Fixed bond

19.

Municipal bonds can be used by different levels of government to do which of the following?

a)

A. Highway projects

b)

B. Tree system projects

c)

C. Hire a new basketball coach

d)

D. Investor projects

20.

An agency bond is a bond related to which of the following?

a)

A. Government

b)

B. Bank

c)

C. Company

d)

D. Individuals

21.

If you buy a $10,000 bond which pays eight percent interest once a year, and you hold the bond for one year, how much will you earn in interest?

a)

A. $80

b)

B. $800

c)

C. $66.66

d)

D. $8.00

22.

A “T-bill” refers to a U.S. Treasury bond which is considered which of the following?

a)

A. Low-risk cash investment

b)

B. High-risk cash investment

c)

C. Current cash investment

d)

D. Discount cash investment

23.

Which of the following is a corporate bond which is secured or “backed” by some or all of the assets of the corporation?

a)

A. Debenture bond

b)

B. Asset-backed bond

c)

C. General revenue bond

d)

D. Ownership bond

24.

Which type of investment carries the lowest risk for an average individual investor?

a)

A. Individual growth stocks

b)

B. Agency bonds

c)

C. Balanced mutual funds

d)

D. Speculative mutual funds

25.

Alice deposits $100 into her mutual fund account every month, buying as many shares as this amount will cover. Which of the following terms best fits this scenario?

a)

A. Monthly average return

b)

B. Monthly cost averaging

c)

C. Return cost averaging

d)

D. Dollar cost averaging

26.

The risk level of a mutual fund is dependent on which of the following?

a)

A. Administrative fees within the fund

b)

B. Stocks and bonds held within the fund

c)

C. Individual growth

d)

D. Stock market

27.

The fund has had a consistent return for the last three to five years. This statement describes which of the following?

a)

A. Performance

b)

B. Risks

c)

C. Costs

d)

D. Balanced

28.

The division of outstanding shares of a corporation into a larger or smaller number of shares

a)

Dividend

b)

Sharing

c)

Stock Split

29.

Which of the following describes the rate at which the general level of prices for goods and services rise?

a)

Liquidity

b)

Interest

c)

Inflation

d)

Appreciation

30.

Which of the following is the act of buying an asset to generate returns from it over a period of time while also taking care of risk and volatility?

a)

Investing

b)

Saving

c)

Compounding

d)

Evaluating

31.

Which of the following is interest computed on the principal, excluding previously earned interest?

a)

Fixed interest

b)

Compound interest

c)

Variable interest

d)

Simple interest

32.

How much would $10,000 on deposit at a five percent annual compound interest rate for three years earn?

a)

$1,500

b)

$1,250

c)

$1,576.25

d)

$2,576.25

33.

Which of the following are intermediaries between buyers and sellers to facilitate security transactions?

a)

Insurance companies

b)

Brokerages

c)

Commercial banks

d)

Investment banks

34.

Which of the following is a true statement about saving?

a)

Saving is income which is not consumed

b)

Saving is typically for long-term goals

c)

Saving usually involves a high risk of losing money

d)

Saving earns a higher return compared to investments

35.

Which of the following is a contract between an investor and an insurance company in which the company promises to make periodic payments to the investor?

a)

High-yield bank account

b)

Certificate of deposit

c)

Money market fund

d)

Annuity

36.

Which of the following does a prepaid tuition plan NOT cover?

a)

Books and supplies

b)

Tuition and fees

c)

Room and board costs

d)

Computer and peripherals

37.

Which of the following is NOT a true statement about investing?

a)

Investing can help a person reach long-term goals

b)

Investing may result in losing some or all of the money invested

c)

Investing usually gains lower returns than saving

d)

Investing is the allocation of money or other resources with regards to the expectation of some benefits in the future

38.

Which of the following describes a portion of ownership in a corporation?

a)

Stock

b)

Bond

c)

Mutual fund

d)

Real estate

39.

Which of the following is NOT one of the most popular precious metals with investors?

a)

Gold

b)

Silver

c)

Copper

d)

Platinum

40.

Which of the following describes the degree to which an asset can be quickly bought in the market without affecting the asset’s price?

a)

Liquidity

b)

Cash flow

c)

Value

d)

Interest

41.

Which of the following involves restricting expenses and keeping the unspent money in one’s own custody for the purpose of accumulating it?

a)

Investing

b)

Compounding

c)

Saving

d)

Evaluating

42.

Which of the following is interest calculated on the initial principal as well as the accumulated interest of previous periods?

a)

Compound interest

b)

Simple interest

c)

Fixed interest

d)

Variable interest

43.

Which of the following is an employer-sponsored retirement savings plan?

a)

401K Plan

b)

Annuity

c)

C. Money market fund account

d)

Savings

Account

44.

Which of the following is considered to be a long-term goal?

a)

Purchasing household furniture

b)

Saving up for a family vacation

c)

Saving for a college education

d)

Establishing an emergency fund

45.

It provides a marketplace for buying and selling millions of corporate stocks

This exchange allows investors to buy and sell stock and provides a key index on performance .

a)

NYSE

b)

AMEX

c)

NASDAQ

d)

SEC

46.

This is the third largest trading floor of trading volume in the US. In 2008, it was acquired by NYSE Euronext.

a)

AMEX

b)

SEC

c)

NASDAQ

d)

NYSE

47.

This is a U.S. based stock exchange that is dominated by technology stocks.

a)

SEC

b)

NASDAQ

c)

AMEX

d)

NYSE

48.

This is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets.

a)

AMEX

b)

SEC

c)

NASDAQ

d)

NYSE

49.

This is the largest stock exchange in the world based on the total market capitalization of its listed securities.

a)

NYSE

b)

AMEX

c)

SEC

d)

NASDAQ