Investing Knowledge Quiz
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This quiz is designed to gaige your understanding of stocks, bonds, mutual funds, and financial markets. You must recieve a score of 85% or higher to pass.
- 1.If you buy a company's stock...
- A.
You own part of the company
- B.
You have lent money to the company
- C.
You are liable for the company's debts
- D.
The company will return your original investment to you with interest
- E.
Don't know/Not sure
- 2.If you buy a company's bond...
- A.
You own a part of the company
- B.
You have lent money to the company
- C.
You are liable for the company's debts
- D.
The company will return your original investment to you with interest
- E.
Don't know/Not sure
- 3.
- A.
U.S. Treasury
- B.
Municipal bond
- C.
Corporate bond
- D.
Don't know/Not sure
- 4.In general, if interest rates go dow, then bond prices...
- A.
Go down
- B.
Go up
- C.
Are not affected
- D.
Don't know/Not sure
- 5.
- A.
A bond that is rated as "below investment-grade" by rating agencies
- B.
A bond that has declined dramatically in value
- C.
A bond that has defaulted
- D.
Don't know/Not sure
- 6.A "no-load" mutual fund is one that...
- A.
Carries no fees
- B.
Carries no sales charges
- C.
Does not contain high-rish securities
- D.
Has no limits on the period of time in which it can be bought and sold
- E.
Don't know/Not sure
- 7.In general, investments that are riskier tend to provide higher returns over time than investments with less risk.
- A.
True
- B.
False
- C.
Don't know/Not sure
- 8.
- A.
5%
- B.
10%
- C.
15%
- D.
25%
- E.
Don't know/Not sure
- 9.Over that last 20 years in the U.S., the best average returns have been generated by:
- A.
Stocks
- B.
Bonds
- C.
Money market accounts
- D.
Precious metals
- E.
Don't know/Not sure
- 10.
- A.
FDIC (Federal Deposit Insurance Corporation)
- B.
FINRA (Financial Industry Regulatory Authority)
- C.
SEC (Securities and Exchange Commisiion)
- D.
None of the above
- E.
Don't know/Not sure
- 11.If a company files for bankruptcy, which of the following securities is most at risk of becoming virtually worthless?
- A.
The company's preferred stock
- B.
The company's common stock
- C.
The company's bonds
- D.
Don't know/Not sure
- 12.
- A.
Municipal bonds are lower risk
- B.
There is a greater demand for municipal bonds
- C.
Municipal bonds can be tax-free
- D.
Don't know/Not sure
- 13.
- A.
The different investments each class makes
- B.
The different fees and expenses each class charges
- C.
The different investment advisers in charge of managing each class
- D.
Don't know/Not sure
- 14.
- A.
Retirement
- B.
College
- C.
Long-term health care
- D.
Don't know/Not sure
- 15.A bear maket is best described as...
- A.
A market experiencing prolonged periods of rising prices
- B.
A market experiencing prolonged periods of decreasing prices
- C.
A market that remains flat for more than a year
- D.
None of the above
- E.
Don't know/Not sure
- 16.
- A.
U.S. Corporate bonds
- B.
U.S. Treasury bills
- C.
U.S. Treasury bonds
- D.
U.S. Treasury notes
- E.
Don't know/Not sure
- 17.
- A.
Dow Jones Industrial Average
- B.
NASDAQ compiste index
- C.
Russell 2000
- D.
S&P 500
- 18.
- A.
Money market fund
- B.
Banker's acceptance
- C.
Treasury Bills
- D.
Stable Value fund
- E.
A fund that includes A,B, and C in its investment mix.
- 19.Funds that invest in large publicly traded companies with a market capitalization of around $10 billion or more are known as ________________________________.
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