Which of the following accurately describes a difference between an individual bond compared to a bond fund?

Investing Unit Test

Quiz
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others
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9th Grade
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Medium
John Rosser
Used 3+ times
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A bond guarantees you a higher rate of return than a bond fund
A bond is issued by a company while bond funds only invest in government bonds
A bond is considered to be a less diversified investment than a bond fund
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following statements about Exchange Traded Funds (ETFs) is TRUE?
An ETF is a single stock that you can buy in the stock market
Actively managed ETFs have very low fees
ETF prices can change throughout the day as they are exchanged on the market
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the statements below BEST describes the relationship between risk and return when considering an investment?
a. Investors expect to earn a lower return when they invest in a high risk asset
b. Investors expect to earn a higher return when they invest in a low risk asset
c. Investors expect to earn a higher return when they invest in a high risk asset
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why is diversification a recommended investment strategy?
Investing in a diversified portfolio guarantees that you won’t lose money with your investments
If you tell your fund manager to use diversification, they’ll charge you lower fees
Diversifying your portfolio helps reduce risk
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is a bond different from a stock?
A bond is a loan you give to an organization while a stock is partial ownership in a company
Bonds are typically riskier than stocks but have the potential to earn higher returns
Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How can someone make money from investing in a stock?
They receive dividends or they sell the stock at a higher price than what they bought it for
The stock loses value but the overall market experiences a positive return
They sell the stock for the same price they bought it for
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a brokerage account used for?
It’s an online portal that allows you to set up appointments with a fund manager
It’s the account you use to pay any taxes you owe on money you earned on your investments
It’s a type of account used to buy and sell stocks, bonds, and funds
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