Investment Knowledge Quiz: Trivia Questions!

19 Questions | Total Attempts: 121

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Investment Knowledge Quiz: Trivia Questions!

Do you have enough financial investment knowledge to pass this quiz? One of the most common ways to ensure you increase the money you have is by making investments. Not every investment can make more from the cash you choose to invest. It is, therefore, essential to know what to look out for. This quiz is designed to help rate how informed you are about different types of investments. Do check it out and see what more you will learn.


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. 
    Which type of bond is the safest?
    • 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. 
    Which is the best definition of a "junk bond?"
    • 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. 
    What is a reasonable average annual return that can be expected from a broadly diversified U.S. stock mutual fund over the long run?
    • 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. 
    Which of the following best explains why many municipal bonds pay lower yields than other government bonds?
    • 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. 
    The principle difference between mutual fund share classes (Class A, Class B, Class C, etc.) is:
    • 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 Section 529 Plan is a tax-advantaged way to save for:
    • 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. 
    Which of the following bonds has the shortest maturity?
    • 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. 
    Which of the following market indexes represent the movement of 30 key stocks?
    • A. 

      Dow Jones Industrial Average

    • B. 

      NASDAQ compiste index

    • C. 

      Russell 2000

    • D. 

      S&P 500

  • 18. 
    Which of the following is considered a Cash Equivalent?
    • 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 ________________________________.