WorksheetsDay Six: Investments and Financial Planning Quiz
Total questions: 20
Worksheet time: 10mins
What is an investment portfolio?
A collection of different types of investment products owned by a person
A single type of investment product owned by a person
A list of potential investments
A document issued by the SEC
Which type of investment is considered safe?
Speculative investments
Day trading
Investments with high profit potential
Stable investments with lower profit potential
What is dollar-cost averaging?
Investing a fixed dollar amount on a regular basis regardless of share price
Buying stocks and selling them within the same day
Investing in high-risk speculative stocks
Purchasing bonds with fixed interest rates
What does the Securities and Exchange Commission (SEC) regulate?
Real estate transactions
Issuance of stocks and bonds by public corporations
Interest rates on bonds
Mutual fund dividends
What happens to stock prices when interest rates rise?
Stock prices become unpredictable
Stock prices remain unchanged
Stock prices increase
Stock prices fall
What is the main feature of preferred stock?
It earns interest like bonds
It has the highest potential growth rate
It pays a fixed dividend and provides steady income
It grants ownership interest in the corporation
What is the face value of a bond?
The price paid to purchase the bond
The amount the bondholder receives on the date the bond matures
The interest earned on the bond
The market value of the bond
What happens to the price of a bond when interest rates rise?
The price of the bond increases
The price of the bond becomes unpredictable
The price of the bond drops
The price of the bond remains the same
What is the advantage of municipal bonds?
They are backed by the SEC
They are risk-free investments
They pay higher interest rates than corporate bonds
Interest received is exempt from federal income tax
What is a treasury bill (T-Bill) best suited for?
Investors looking for high-risk investments
Investors looking for secure, low-risk investments
Investors looking for speculative growth
Investors looking for tax-free interest
What is fiat money?
Money backed by the full faith and credit of the government
Money used only for barter
Money backed by gold reserves
Money issued by private corporations
What is the role of the Federal Reserve Bank in the economy?
It sets stock market prices
It regulates corporate bonds
It distributes new coins and currency to consumers and businesses
It creates paper money and coins
What is the main advantage of using a debit card?
It allows a person to access cash easily
It builds a person’s credit history
It guarantees payment by the bank
It avoids identity theft
What is an Electronic Funds Transfer (EFT) service used for?
Paying bills with cash
Purchasing stocks and bonds
Convenient and secure movement of money
Making long-distance calls
What is a disadvantage of using a prepaid gift card?
It guarantees payment by the bank
It avoids identity theft
It builds a person’s credit history
It can be used by anyone if lost
What is the main advantage of paying with a money order?
It builds a person’s credit history
It does not require a bank account
It avoids counterfeit risks
It requires a bank account
What is the purpose of advertising?
To create peer pressure among consumers
To distribute new currency
To regulate stock market performance
To provide tax-free investment options
What is the advantage of using a credit card instead of cash?
It helps build a person’s credit history if paid off in full each month
It avoids identity theft
It guarantees payment by the bank
It provides tax-free interest
What is the main feature of a money market fund?
It pays dividends that reflect long-term interest rates
It invests in high-quality, short-term debt securities
It has high risks and high returns
It is backed by the SEC
What is barter?
The exchange of goods and services for other goods and services
The exchange of goods and services for money
A type of investment strategy
A method of paying bills online
