How To Invest Your Money?
Take this investing quiz and check how to invest your money! Let's prove yourself now by taking this quiz!
- 1.A blue chip stock is associated with a company:
- A.
With a consistent record of relatively rapid growth and earnings
- B.
With a spotty earnings pattern but potential for substantial earnings in the future
- C.
Which dominates its respective industry and has a good company management reputation
- D.
With a steady stream of income paying high dividends and retaining only a small portion of profits
- 2.A diversified portfolio is desirable because it:
- A.
Increases the risk/return ratio
- B.
Limits investors choices to only one or two investment tools
- C.
Indicates an investor is a good predictor of the return an investment will have
- D.
Decreases risk by investing money in a variety of investment tools
- 3.A growth stock is associated with a company:
- A.
That is new with a consistent record of relatively rapid growth and earnings
- B.
With a spotty earnings pattern but potential for substantial earnings in the future
- C.
Which dominates its respective industry and has a good company management reputation
- D.
With a steady stream of income paying high dividends and retaining only a small portion of profits
- 4.An income stock could also be called a:
- A.
Treasury bond
- B.
Value Stock
- C.
Countercyclical Stock
- D.
Cyclical Stock
- 5.An investor can assess the health of the economy by researching the:
- A.
Dow Jones Industrial Average
- B.
Standard and Poor's 500 Composite Index
- C.
National Association of Security Dealers Automated Quotations (NASDAQ)
- D.
All of the above
- 6.Brian is 56 years old. He is anticipating retirement in the next ten years. He would like to invest in the stock market. What price/earnings ratio would satisfy Brian's needs?
- A.
7-10
- B.
15-25
- C.
40-50
- D.
The P/E ratio of a company should not affect Brian's choice
- 7.Conner wants to purchase stocks with the money he received from his tax return. Who would he contact to make the transactions?
- A.
A brokerage firm
- B.
A depository institution
- C.
The New York Stock Exchange
- D.
Any of the above
- 8.Cyclical stock are greatly influenced by:
- A.
Changes in the market that make it a bull market
- B.
Changes in the economic business cycles
- C.
The highest and lowest prices the stock was sold at per share during the last 52 weeks
- D.
The ratio of stock to bonds that are sold on a daily basis
- 9.Stock analysts use this term for a market which is doing poorly and does not have investor confidence:
- A.
Rooster market
- B.
Bear market
- C.
Bull market
- D.
Sheep market
- 10.The numerical measure an investor looks at when determining how well a company's stock is doing is the:
- A.
P/E ration
- B.
Beta
- C.
Book value
- D.
All of the above
- 11.The relatiioshipp between risk and return in investing can be stated as:
- A.
Higher risk indicates lower return
- B.
Higher risk indicates higher return
- C.
Lower risk indicates higher return
- D.
No relationship exists between risk and return
- 12.The value of a stock can change when:
- A.
Dollar value of a stock increases or decreases
- B.
A stock split occurs
- C.
A merger happens between two companies
- D.
All of the above
- 13.What is a bond?
- A.
A type of debt that a company issues to investors for a specified amount of time
- B.
A share of ownership in a company
- C.
A type of investment that is only offered by depository institutions
- D.
A type of Certificate of Deposit with a higher than average interest rate
- 14.What is inflation?
- A.
The rise in the general level of prices.
- B.
The uncertainty the return on an investment will deviate from what is expected.
- C.
The number of times something happens to money.
- D.
The projected value of an investment at the end of a specified time frame.
- 15.What should be remembered when applying the Rule of 72?
- A.
Tax deductins are included within the equation
- B.
Interest earned is reinvested
- C.
The rule is only an approximation
- D.
Both b and c
- 16.When comparing and contrasting a mutual fund and an index fund, which of the following is true?
- A.
The stocks and bonds that create a mutual fund are chosen by the investor, where as the stocks and bonds that crete an index fund are chosen by a group of experts
- B.
The stocks and bonds that crete a mutual fund are chosen by a group of experts, where as the stocks and bonds that crete an index fund and pre-determined by an index
- C.
There is no difference between a mutual fund and an index fund
- D.
None of the above
- 17.Which of the following investment tools is considered to be a speculative investment?
- A.
Real Estate
- B.
Mutual Fund
- C.
Savings Bond
- D.
Futures
- 18.Which of the following is true in regards to investing in stock?
- A.
A stock investor may or may not receive a profit
- B.
A stock investor may receive a dividend
- C.
A stock investor owns a part of a company
- D.
All of the above
- 19.Which of the following statements is true in regards to paying taxes on investments?
- A.
Since investments are considered unearned income, taxes do not have to be paid on earnings.
- B.
Taxes have to be paid on every type of investment in the year in whcih the unearned income is received.
- C.
Taxes only have to be paid on employer-sponsored investment accounts.
- D.
None of the above
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