Personal Finance - Investing Quiz

Match the following types of investments with their explanation

• represents a fraction of the ownership of the issuing corporation

• Stocks

• allows you to invest in all three categories of investments with a smaller amount of money

• Bonds

• essentially loans to a corporation or governmental body

• Cash Alternatives

• Includes savings accounts, money markets, CDs, guaranteed investment contracts, etc

• Mutual Funds

​ (a)   entitles the owner to vote at shareholders' meetings.

• Common stock
• Preferred stock

(a)   does not have voting rights

• Preferred stock
• Common stock

(a)   has a higher claim on assets and earnings than ​ (b)  

• Preferred stockholders
• common stockholders

Order the following investments from highest risk to least risk.

• Bonds

• Stock

• Cash Alternatives

The price of stock is decided by the executives of the company.

• True

• False

Which of the following are ADVANTAGES of investing in stocks. Mark all that apply

• Easy to buy and sell

• Subject to market volatility

• Greater risk to principal

• Can provide capital appreciation as well as income from dividends

• Income from them is tax exempt

Where are stocks bought and sold?

• stock exchange

• bank

• internet

• financial advisors office

Where could you go if you were interested in purchasing stocks to set up a brokerage account? Mark all that apply.

• stock exchange

• bank

• internet

• financial advisors office

What are the two ways that you can earn money from stocks?