Fin Lit Investing Quiz

When you purchase a _______, you become part owner of a company.

• bond
• dividend
• stock
• portfolio

Where can you get a 401k?

• H&R Block Tax Advisors
• From your employer
• From your insurance agent
• From the government

How does investing in the stock market differ from putting money in a savings account at a bank?

• Savings has a higher return
• Stocks are safer
• Savings is more liquid (easily accessible)
• You cannot lose money when investing

You bought 30 shares of Ravioli Den stock for $50 a share.  You then sold it for $55 a share.  What was your profit or loss on Ravioli Den stock?

• Gained $150
• Lost $150
• Gained $1650
• Lost $1500

True or False?
Investors expect a high return if they invest in a high risk investment.

• True
• False

Which of these is NOT true about Diversification?

• It means spreading your investments out in varied investments
• It lowers the risk of your investments
• You are guaranteed to not lose money if you diversify.
• You should always follow the principle of diversification when investing.

Which of these is the most diverse portfolio?

• Investing in an S&P 500 index fund
• Investing in one oil stock
• Investing in a mutual fund that is made up of 30 restaurant stocks
• Investing in 20 finance companies

Which of the following is NOT true about Index funds?

• They are diverse
• They have lower fees
• They don't require you to monitor them closely
• They guarantee higher returns than the market

When should you start saving for your retirement?

• NOW!
• As soon as your college loans are paid off in full.
• As soon as you start your first full-time job.
• 20 years before you plan to retire

Your employer offers a 401k match at your first job.  If you put in 7% of your pay, you get the full match.  How much should you contribute?

• 36%, put in the max legally allowed
• 7%, always put in enough to get the full match
• 0%, you need to pay off student loans first
• 3%, make sure you can pay your other bills first