Investing Knowledge Quiz

19 Questions

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Knowledge Quizzes & Trivia

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.


Questions and Answers
  • 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 ________________________________.