Investing
2 years ago
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20 QuestionsShow answers
  • Question 1
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    Q.

    A key difference between saving and investing is

    answer choices

    Saving is for everyone, investing is for the wealthy

    Your money is insured when investing, it is not in savings

    Investing has a guaranteed return, savings does not

    Saving is for emergencies & goals, investing is for long-term wealth

  • Question 2
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    Q.

    Why is compound interest more beneficial than simple interest? (hint: choose 2 correct answers)

    answer choices

    Your money grows faster when it is compounded

    You earn interest on your interest

    Fees for compound interest are greater than simple interest

    Compound interest is hard to calculate, so fewer use it

  • Question 3
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    Q.

    Which would be considered the highest risk investment type?

    answer choices

    Stock

    Mutual Fund

    Bond

    Money Market Account

  • Question 4
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    Q.

    The relationship between risk and return can be stated as

    answer choices

    Higher risk indicates higher return

    Higher risk indicates lower return

    Lower risk indicates higher return

    No relationship exists between risk and return

  • Question 5
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    Q.

    Which is NOT a stock market index?

    answer choices

    New York Stock Exchange

    Dow Jones Industrial Average

    S&P 500

    Nasdaq

  • Question 6
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    Q.

    How can you make money on stocks? (hint: choose 2 correct answers)

    answer choices

    A capital gain

    Interest

    Dividends

    Holding the stock at least 3 years

  • Question 7
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    Q.

    If interest rates rise, what will typically happen to bond prices?

    answer choices

    Rise

    Fall

    Stay the same

  • Question 8
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    Q.

    The face value of a bond is called

    answer choices

    Principal

    Coupon

    Par Value

    Maturity Date

  • Question 9
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    Q.

    Which is not one of the companies that rates bond?

    answer choices

    S&P

    Experian

    Moody's

    Fitch

  • Question 10
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    Q.

    Andy earned $300 on a $1000 investment. What is his current ROI (return on investment)?

    answer choices

    2%

    3%

    30%

    70%

  • Question 11
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    Q.

    Which is true about Initial Public Offerings (IPOs)? (hint: choose 3 correct answers)

    answer choices

    IPOs occur when a private company becomes publicly traded

    All companies file an IPO

    The value of an IPO can be difficult to measure

    When an IPO occurs, a company raises money to grow the business

  • Question 12
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    Q.

    What is the primary difference between index funds (IF) and actively managed funds (AMF)? (hint: choose 3 correct answers)

    answer choices

    AMF typically carry lower costs (expense ratios) than IF

    The goal of an IF is to earn a higher return than the market

    AMF try to outperform their benchmark & peer group average

    IF try to track performance of a particular index

  • Question 13
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    Q.

    Brokers who suggest specific investments, create an investment plan, & make adjustments are

    answer choices

    Discount/Online Brokers

    Discount Brokers with Assistance

    Full-Service Brokers

    Money Managers

  • Question 14
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    Q.

    A diversified portfolio is desirable because

    answer choices

    It limits investment choice

    It's a good predictor on rate of return

    It increases risk and return

    It decreases risk

  • Question 15
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    Q.

    Which of the following accurately describes asset allocation? (hint: choose 2 correct answers)

    answer choices

    Well-balanced portfolio of different stock classifications

    Dividing among different asset categories based on risk

    Dividing among different asset categories based on time

    Chance your investment won't be worth as much in the future

  • Question 16
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    Q.

    Putting regular amounts of money into an investment account at specific time intervals is

    answer choices

    Compound interest

    Diversification

    Dollar cost averaging

    Inflation

  • Question 17
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    Q.

    Which is NOT a good reason to buy a stock fund like the S&P 500?

    answer choices

    Have a diversified portfolio

    Have an investment with low fees

    Don't have to monitor as closely as an actively managed account

    You want to "beat the market" with your ROI

  • Question 18
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    Q.

    Your money remains tax-deferred in this account until you withdraw (taxed as income)

    answer choices

    Roth IRA

    Traditional IRA

  • Question 19
    20 seconds
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    Q.

    Why is it important to start investing as soon as possible?

    answer choices

    You take less risk when you are young, so money will be safe

    You have more time for your money to compound

    Investing is an easy way to make quick money

    Fees on investments are cheaper when you are younger

  • Question 20
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    Q.

    True or False: Investing in a diversified portfolio of stocks guarantees you will not lose money.

    answer choices

    True

    False

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