WorksheetsUnit 6 Review Questions
Total questions: 25
Worksheet time: 13mins
What does a share of stock represent?
Ownership in a company
A loan to the government
A type of tax
A bank fee
What is a bond?
Ownership in a company
A digital asset
A savings account
A loan to a corporation or government
What is diversification?
Avoiding stocks completely
Investing in only one company
Spreading investments to reduce risk
Paying fewer taxes
What is an IPO?
A company’s first sale of stock to the public
A type of mutual fund
A government bond
A retirement account
Growth stocks usually:
reinvest profits to expand
pay high dividends
stay the same value
always lose value
Defensive stocks are companies people buy:
Only in bull markets
Based on trends
Only in recessions
No matter how the economy is doing
What does risk tolerance mean?
How many stocks you own
How comfortable you are with risk
How fast you trade stocks
The amount of tax owed
A mutual fund is:
A loan to a company
A fund that pools money to invest in many assets
A type of credit
A savings account
An index fund:
Tries to beat the market
Copies a market index
Has zero risk
Is only for short-term investing
What is the relationship between risk and return?
Lower risk always equals higher return
Higher reward usually requires higher risk
Risk and return have no connection
Higher risk always guarantees profit
Short-term investing usually means:
1–3 years
10+ years
Less than 1 year
At least 20 years
Long-term investing usually means:
A. A few months
B. Less than a year
C. Investing for 5+ years
D. Day trading
What is an expense ratio?
An investment bonus
A tax refund
A loan payment
The yearly fee charged by a fund
What does the SEC do?
Gives out loans
Pays dividends
Manages retirement accounts
Protects investors and regulates markets
Equity in real estate is:
The rent price
The home’s total cost
The value of a home minus what you owe
The HOA fee
Cryptocurrency is:
Guaranteed income
A physical coin
A digital currency that is high risk
A type of savings account
A brokerage account allows you to:
Pay monthly bills
Buy groceries
Borrow money from the stock market
Buy and sell investments
What is dollar-cost averaging?
Investing all your money at once
Investing the same amount regularly over time
Only investing when prices are high
Avoiding the stock market
A Roth IRA allows your money to:
Grow and be withdrawn tax-free
Be used only for short-term investments
Skip all investing fees
Avoid stock market risk
How do investors typically make money from stocks?
Paying taxes on shares
Keeping money in cash
Dividends and selling at a higher price
Avoiding risk completely
What is one right of a shareholder?
Set company prices
Control employee salaries
Avoid all losses
Vote for the board of directors
Which behavior can hurt investors the most?
Staying consistent
Following the crowd and panic selling
Diversifying
Investing long-term
Why is diversification important?
It reduces overall risk
It guarantees profit
It avoids all losses
It increases taxes
Why do ETFs usually have lower fees?
They are risk-free
They pay more dividends
They track indexes and require less management
They avoid taxes
Why are bonds considered safer than stocks?
They pay fixed interest and are less volatil
They always increase in value
They have no risk
They grow faster than stocks
