Personal Finance Chapter 2 Quiz

24 Questions | Total Attempts: 1212

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Personal Finance Chapter 2 Quiz

Chapter 2 Dave Ramsey Investment Options


Questions and Answers
  • 1. 
    Which is NOT true about investments:
    • A. 

      Never invest using borrowed money.

    • B. 

      Diversification will help lower the risk

    • C. 

      Always invest only for tax savings purposes.

    • D. 

      Never invest only for tax savings purposes.

  • 2. 
    The risk return ration says: 
    • A. 

      When risk goes down, the return generally will go up.

    • B. 

      When the risk goes up, the return generally will go down.

    • C. 

      When the risk goes up, the return generally will go up.

    • D. 

      None of the above.

  • 3. 
    What is true about investing in a single stocks?
    • A. 

      There is a low degree of risk.

    • B. 

      There is a high degree of risk.

    • C. 

      The risk is the same whether you invest in mutual funds or stocks.

    • D. 

      If the stock is from your employer, the risk is lower.

  • 4. 
    Which is not a good investment?
    • A. 

      Gold

    • B. 

      Commodities

    • C. 

      Viaticals

    • D. 

      All of the above

  • 5. 
    The KISS rule of investing teaches:
    • A. 

      The more sophisticated the investment, the better.

    • B. 

      Keep things simple and never buy something you don't understand.

    • C. 

      It is normal to have investments you don't understand as long as you have a broker.

    • D. 

      None of the above

  • 6. 
    The most aggressive mutual funds tend to be from:
    • A. 

      Companies that are a little younger and growing

    • B. 

      Companies that are overseas

    • C. 

      Companies that are older and well-established.

    • D. 

      All of the above

  • 7. 
    Your piece of ownership in a company is called:  
    • A. 

      Portion

    • B. 

      Dividend

    • C. 

      Profit

    • D. 

      Share of stock

  • 8. 
    Which of the following is a risk to consider when investing?
    • A. 

      You could lose all of your money

    • B. 

      Inflation

    • C. 

      Your money is not liquid

    • D. 

      All of the above

  • 9. 
    Which one is not a type of annuity?
    • A. 

      Variable

    • B. 

      Fixed

    • C. 

      Stable

    • D. 

      None of the above

  • 10. 
    A savings account with a certificate is a:
    • A. 

      Bond

    • B. 

      Annuity

    • C. 

      C. D.

    • D. 

      Viatical

  • 11. 
    Save or Invest?  Prom is coming up in a few months...
    • A. 

      Save

    • B. 

      Invest

  • 12. 
    Save or Invest?  Plan a retirement fund...
    • A. 

      Save

    • B. 

      Invest

  • 13. 
    Save or Invest? You want to buy a car in two years...
    • A. 

      Save

    • B. 

      Invest

  • 14. 
    Save or Invest? Start a college fund for your baby...
    • A. 

      Save

    • B. 

      Invest

  • 15. 
    Save or Invest? You want to buy a house within five years...
    • A. 

      Save

    • B. 

      Invest

  • 16. 
    Diversification means to spread around. 
    • A. 

      True

    • B. 

      False

  • 17. 
    With all investments, as the risk goes up, the return goes down.
    • A. 

      True

    • B. 

      False

  • 18. 
    Liquidity is the availability of your money.
    • A. 

      True

    • B. 

      False

  • 19. 
    100% of the ten-year periods in the history of the stock market made money.
    • A. 

      True

    • B. 

      False

  • 20. 
    Real estate is the most liquid of all investments.
    • A. 

      True

    • B. 

      False

  • 21. 
    A share is a piece of ownership in an annuity. 
    • A. 

      True

    • B. 

      False

  • 22. 
    A commodity is a savings account with a certificate. 
    • A. 

      True

    • B. 

      False

  • 23. 
    Profits that a company distributes to its shareholders are called dividends.  
    • A. 

      True

    • B. 

      False

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