WorksheetsInvestment Fundamentals & Bonds (Part 1)
Total questions: 49
Worksheet time: 25mins
Which statement best defines Earnings Per Share (EPS)?
Total revenue divided by total assets
Net profit divided by outstanding common shares
Share price divided by net income
Dividends paid divided by number of shareholders
Which formula correctly represents the Price-to-Earnings (P/E) Ratio?
Stock Price divided by EPS
Net Income divided by Outstanding Shares
Annual Dividends divided by Stock Price
EPS divided by Stock Price
Dividend Yield is best described as:
Annual dividends per share divided by stock price
Net income divided by outstanding shares
Gain from selling a stock above purchase price
Stock price divided by annual dividends
Which form of return is defined as profit from selling a stock at a higher price than purchased?
Dividend Yield
Capital Gains
Interest Income
Coupon Rate
Dividends are:
Corporate profit distributions to shareholders
Fees paid to brokers when buying stocks
Taxes on investment income
Government payments to bondholders
Which financial statement reports revenues, expenses, and net profit over a period?
Balance Sheet
Income Statement
Cash Flow Forecast
Statement of Owner’s Equity
The Balance Sheet provides:
A record of dividends paid during the year
A snapshot of assets, liabilities, and owner’s equity at a point in time
A list of daily stock prices
A forecast of next quarter’s profits
Which item is a marketplace for buying and selling stocks?
Brokerage Account
Stock Exchange
Stock Index
Limit Order
A stock index is primarily used to:
Set the coupon rate for new bonds
Benchmark the performance of a group of stocks
Match buyers and sellers for individual trades
Guarantee minimum returns to investors
A market order instructs an investor to:
Buy or sell only at a specified price or better
Buy or sell immediately at the current best price
Execute the trade only if the price reaches a trigger
Borrow shares to sell them short
Which order type triggers when price hits a preset level to limit losses or lock profits?
Market Order
Limit Order
Stop Order
Short Sale
Short selling most accurately involves:
Borrowing and selling shares to repurchase later at a lower price
Buying shares and holding them for dividends
Purchasing a bond at a discount to par value
Selling shares after a long holding period for capital gains
Which statement best defines a bond in this section?
An ownership stake in a company with voting rights
A debt security where the issuer borrows funds and promises repayment with interest
A derivative contract used solely for hedging currency risk
A savings account insured by the government
Who is the issuer in the context of bonds?
The investor lending money
The entity borrowing funds (e.g., governments or corporations)
The broker executing trades
The rating agency evaluating credit risk
Corporate bonds are issued primarily to:
Finance federal budget deficits
Raise capital for companies
Provide tax-exempt income for local citizens
Insure deposits at commercial banks
Which bond type is typically tax-exempt and issued by local governments?
Corporate Bonds
Treasury Bonds
Municipal Bonds
Agency Bonds
T-Bills, Treasury Notes, and Treasury Bonds are all examples of:
Government bonds issued by the U.S. government
Corporate debt issued by large companies
Agency bonds for housing projects
Municipal revenue bonds
Agency bonds are issued by:
Government-sponsored entities for purposes like housing or education
Local governments to fund public works
Private corporations to expand operations
International organizations to finance trade
Which item best matches the description: “Share price divided by earnings per share”?
Dividend Yield
Earnings Per Share
Price-to-Earnings Ratio
Beta
Which term refers to the face value repaid to the bondholder at maturity?
Coupon rate
Par value
Yield to maturity
Market price
What does the maturity date of a bond represent?
The date the coupon rate is set
The date periodic interest is first paid
The date the principal is repaid
The date the bond is issued
Zero-coupon bonds are best described as which of the following?
Bonds that pay interest monthly at a variable rate
Bonds sold at a discount that pay no periodic interest but return full par at maturity
Bonds that pay semi-annual interest and return par at maturity
Bonds issued only by corporations with high ratings
Which type of bond is generally considered the lowest risk due to government backing?
Treasury bonds
Municipal revenue bonds
Corporate debentures
Convertible bonds
Which mutual fund type primarily targets companies expected to expand rapidly?
Income fund
Growth fund
Index fund
Balanced fund
An income fund most likely focuses on what kind of securities?
Non-dividend-paying growth stocks
Dividend-paying stocks
Foreign currency futures
Zero-coupon bonds
A growth and income fund aims to do which of the following?
Eliminate volatility by holding only cash
Balance growth potential and dividends
Track the performance of a market index
Invest solely in one industry
Which fund invests primarily in one industry, such as technology or healthcare?
Balanced fund
Sector fund
Index fund
Asset allocation fund
A balanced fund is best described as holding which mix?
Only dividend-paying stocks
Only government bonds
A mix of stocks and bonds
Cash equivalents only
Which fund type diversifies across stocks, bonds, and cash to maintain a strategic mix?
Asset allocation fund
Growth fund
Sector fund
Target-date fund
A target-date (life cycle) fund most likely adjusts its asset mix based on which factor?
Inflation index changes
Retirement date timeline
Quarterly GDP growth
Daily market volatility
Which role is responsible for professionally overseeing a mutual fund’s investments?
Custodian bank
Fund manager
Transfer agent
Auditor
What is a mutual fund prospectus primarily designed to provide?
Daily trading signals
Legal details on objectives, risks, fees, and performance
Tax returns for prior years
A list of all shareholders
Using the formula NAV = (Assets − Liabilities) ÷ Number of Shares, what does NAV represent?
The fund’s total market capitalization
The per-share value of the mutual fund
The fund’s annual expense ratio
The load charged by the broker
A mutual fund’s expense ratio is defined as which of the following?
Annual operating costs as a percentage of assets
A one-time front-end sales charge
The tax rate on capital gains
The fee paid only when selling shares
Which statement best defines an Exchange-Traded Fund (ETF)?
A savings account insured by a bank with fixed interest
A basket of securities that trades like a single stock on an exchange
A government bond that pays interest semiannually
A company that manages retirement plans for employees
In the context of ETFs, what are commissions?
Taxes paid on capital gains
Broker fees charged for executing trades
The fund’s internal management expenses
Penalties for selling shares too early
What does margin purchasing of ETFs involve?
Buying ETF shares using only cash on hand
Buying ETF shares with borrowed funds
Buying ETF shares directly from the fund sponsor
Buying ETF shares only at the market close
Which choice is an example of a collectible as an investment?
A certificate of deposit with a fixed term
A diversified bond index fund
A rare baseball card valued for its scarcity
A standard checking account
In collectibles investing, appreciation or depreciation most directly depends on:
Government-set interest rates only
Rarity, demand, condition, or trends
The issuer’s credit rating
The fund manager’s stock-picking skill
Which statement accurately defines cryptocurrency?
Physical coins backed by gold reserves
Digital assets secured by cryptography and blockchain for decentralized transactions
Online bank accounts insured by a central authority
Prepaid cards used for mobile payments
What is a blockchain in the context of cryptocurrency?
A private server owned by a single company
A distributed ledger that records transactions
A government database for fiat currency balances
A cloud wallet for storing passwords
Which feature distinguishes decentralized cryptocurrencies from fiat currency?
They are printed by a national mint
They have no central authority controlling the network
They guarantee a fixed exchange rate
They pay automatic interest to holders
According to the vocabulary bank, what primarily drives the value of many cryptocurrencies when there are no underlying assets?
Guaranteed dividends
Supply and demand dynamics
Government price controls
Asset-backed collateral
Which description matches Bitcoin (BTC)?
A platform focused on smart contracts and applications
The first and largest cryptocurrency by origin
A meme-based token created as a joke
A stablecoin pegged to the U.S. dollar
Which description matches Ethereum (ETH)?
A platform enabling smart contracts and decentralized apps
The earliest cryptocurrency and original blockchain
A collectible coin backed by precious metals
A payment network run by a central bank
Which description best fits Dogecoin (DOGE)?
A government-issued digital currency
A meme-based cryptocurrency
A private blockchain used by banks
An ETF that tracks technology stocks
What might be one reason why a stock becomes more valuable over time?
The industry is growing
The company is poorly managed
There is little demand for the product
The industry is getting smaller
Choose the type of investment that carries a lower amount of risk.
Small Cap Stock
S&P 500 Index ETF
Based on the image, what is the current trading price of McDonald's stock?
$188.50
$186.75
$24.43
$1.75
