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Personal Finance 14

Investing

Question ChoicesAnswer
What are dividends? A. a small part or share of a company. B. A type of savings account that grows over time. C. A distribution of a small percentage of profits to shareholders. C. A distribution of a small percentage of profits to shareholders.
What happens when a bond becomes due? A. you pay it back to the issuer, minus interest. B. The issuer will pay you back, plus interest. C. you pay it back tot he issuer , plus interest. B. The issuer will pay you back, plus interest
When you buy a ________ you are loaning money to an organization. A. stock. B. bond. C. mutual fund. D. index fund. B. Bond
Which best describes the difference between stocks and bonds? A. Stocks allow investors to share in profits, bonds make investors responsible for company debt. B. Stocks allow investors to own a portion of the company, bonds are loans to the company. B. Stocks allow investors to own a portion of the company, bonds are loans to the company.
Generally speaking, the ______ the risk, the ______ the potential for return or loss. A.Higher; lower. B. Higher; higher. C. Lower; higher. D. Both A and C. B. Higher; higher
What is the primary reason to issue stock? A. to help investors earn a higher rate of return. B. to raise money to grow the company. C. to distribute the risk of bankruptcy across more investors. D. to increase investor awareness of the company B. to raise money to grow the company.
Which type of portfolio might a young investor who is not afraid of risk choose? A.portfolio with a high percentage of stocks. B. portfolio with a high percentage of conservative mutual funds. C. portfolio that is mostly cash. A. portfolio with a high percentage of stocks
Which of the following correctly orders the investments from LOWER risk to HIGHER risk? A. Treasury bond-stock-diversified mutual fund. B. Stock-treasury bond-Diversified mutual fund. C. Treasury bond-diversified mutual fund-stock C. Treasury bond-diversified mutual fund-stock
_______ are typically comprised of a mix of _____ and ______. A. stock; bonds; index fund. B. Bonds; index funds; mutual funds. C. mutual funds; stocks; bonds. D. Stocks; index funds; bonds C. Mutual funds; stocks; bonds.
If an investment is considered "volatile", it means... A. the investment will experience rapid growth over time. B. the value of the investment may be hard to predict. D. the investment is high-risk, and its price will increase quickly B. the value of the investment may be hard to predict
Why might a town decide to issue bonds? A. to help save money for their residents. B. To build new roads or bridges. C. Both A & B. D. Neither A nor B B. to build new roads or bridges
Diversification is important in investing because... A. it helps you to balance your risk across different types of investments. B. It increases your overall risk, which guarantees that you will make more money. C. It ensures that you only make low-risk investments A. It helps your to balance your risk across different types of investments.
Which f the following would be considered the highest risk portfolio? A. 20% savings; 50% mutual funds; 30% bonds. B. 40% mutual funds; 40% treasury bonds; 10% stocks. C. 60% stocks; 30% mutual funds; 10% treasury bonds C. 60% stocks; 30% mutual funds; 10% treasury bonds
Which investment type typically carries the least risk? A. individual stocks. B. Treasury bonds. C. Savings account. D. Mutual funds. C. Saving account
How can investors receive compounding returns? A. By selecting a savings account that has a higher interest rate. B. By investing their earnings back into their original investment. C. By transferring their earnings into a high-risk investment. B. By investing their earning back into their original investment.
Created by: SusieQ60
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