Stocks and Bonds Quiz

What does the term "dividend" refer to in the context of stocks?

• The initial price of a stock

• A share of the company's profits distributed to shareholders

• The face value of a stock

• The number of outstanding shares

Which of the following represents ownership in a company?

• Stocks

• Bonds

• Annuity

• Interest

What is the main difference between stocks and bonds?

• Stocks represent ownership, while bonds represent debt.

• Bonds represent ownership, while stocks represent debt.

• Both stocks and bonds represent ownership in a company.

• Both stocks and bonds represent debt in a company.

What is a bond coupon?

• A discount on the face value of the bond

• The interest rate paid by the bond

• The maturity date of the bond

• The periodic interest payment made by the bond

An activity in which money is put at risk for the purpose of making a profit.

• Invest

• Sell

• Collect

• Buy

What is a bond?

• a certificate of ownership in a corporation, with the right to a share of the earnings

• a payment from an investor to a corporation for the rights to future profits

• a group of stocks sold together for a set price

• a certificate representing a loan from an investor to a corporation or government entity

Which is the LEAST risky investment?

• Stocks

• Annuity

• Loans

• Bonds

A person or agent who trades for you and charges a fee or commission for executing buys and sells of stocks through a stock exchange.

• entrepreneur

• stockholder

• stockbroker

• seller

Which best defines the risk of a financial asset?

• Investing in several different assets with unrelated risks.

• The amount that will be repaid at the end of a bond’s term.

• The probability that an asset will lose value.

• The uncertainty that an asset might gain or lose value.

What happens to the price and interest rate of a bond if the demand for that bond increases?

• Price increases; interest rate is unaffected.

• Price is unaffected; interest rate is unaffected.

• Price increases; interest rate decreases.

• Price decreases; interest rate decreases.