WorksheetsInvesting Quiz- Stocks & Bonds
Total questions: 10
Worksheet time: 5mins
Name
Class
Date
1.
1.What is a stock?
a)
A measurement of a company’s profits
b)
An investment option that allows you to own a small piece of a company
c)
An annual report that includes details about a company’s leadership and earnings
d)
A low-risk savings option that can help you build an emergency fund
2.
2. Which of the following most accurately describes what a bond is?
a)
A bond is a government loan made to an individual investor with the expectation that it will be paid back with interest
b)
A bond is an investment in which a corporation lends an individual investor money with the expectation that it will be paid back with interest
c)
A bond is a government loan made to a corporation with the expectation that it will be paid back with interest
d)
A bond is an investment in which an investor lends money to a corporation or government with the expectation that it will be paid back with interest
3.
3. One difference between bonds and bond funds is…
a)
Buying an individual bond is generally cheaper than buying a bond fund
b)
A bond fund can help you diversify your investment portfolio
c)
Bonds pay dividends to its investors
d)
You receive the principal amount you invest in a bond fund after a certain amount of time
4.
4. Which of the following accurately describes a difference between an individual bond compared to a bond fund?
a)
A bond pays you dividends while a bond fund pays you regular interest
b)
A bond guarantees you a higher rate of return than a bond fund
c)
A bond is issued by a company while bond funds only invest in government bonds
d)
A bond is considered to be a less diversified investment than a bond fund
5.
5. How is a bond different from a stock?
a)
A bond is a loan you give to an organization while a stock is partial ownership in a company
b)
Bonds are typically riskier than stocks but have the potential to earn higher returns
c)
Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations
d)
Bonds are best for earning high returns while stocks are best for providing a stable source of income
6.
6. How can someone make money from investing in a stock?
a)
They sell the stock for a lower price than what they bought it for
b)
They receive dividends or they sell the stock at a higher price than what they bought it for
c)
The stock loses value but the overall market experiences a positive return
d)
They sell the stock for the same price they bought it for
7.
7. You bought 10 shares of stock in StreamingVideoCo for $45 per share. Two months later you sold the 10 shares of stock for $80 per share. What was your profit or loss on StreamingVideoCo stock? (Assume that StreamingVideoCo didn't pay a dividend and that you didn't incur any trading fees during that period.)
a)
Loss of $800
b)
Profit of $350
c)
Loss of $450
d)
Profit of $800
8.
8. Which of the statements below BEST describes the relationship between risk and return when considering an investment?
a)
Investors expect to earn a lower return when they invest in a high risk asset
b)
Investors expect to earn a higher return when they invest in a low risk asset
c)
Investors expect to earn a higher return when they invest in a high risk asset
d)
Investors expect to earn zero return when investing in a low risk asset
9.
9. Why is diversification a recommended investment strategy?
a)
Investing in a diversified portfolio guarantees that you won’t lose money with your investments
b)
If you tell your fund manager to use diversification, they’ll charge you lower fees
c)
Diversifying your portfolio helps reduce risk
d)
If you diversify your portfolio, you will definitely earn a high return
10.
10. As a shareholder in a public company, what are the benefits available to you?
a)
You may receive dividends from the company, if the company pays them, and you have ownership of a portion of the company
b)
You must receive dividends from the company (all companies must pay them) and you can select members of the management team (e.g., the Chief Executive Officer (CEO))
c)
You can select members of the management team [e.g., the Chief Executive Officer (CEO)] and vote for members of the Board of Directors
d)
You have ownership of a portion of the company and receive coupon payments from the issuer
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