Investment Quiz

Which is true about risk in investing?

• Risk tolerance is an individual's ability and willingness to take on uncertainty

• An individual's risk tolerance can change over time

• Riskier investments have the potential for higher return which can influence the level of risk an investor is willing to take

• All of the above

Which of the following is NOT considered a speculative high risk investment that often has high price fluctuations?

• Cryptocurrency

• Collectibles

• Precious Metals

• Stock Market

Growth stocks are stocks in companies that have high potential for return whereas value stocks are those that typically trade below what they are worth.

• True

• False

Which investment is generally considered to be a safer investment, but typically offers lower returns?

• Stocks

• Bonds

• Cryptocurrency

• Foreign exchange market

Which is true about bonds?

• Bonds represent ownership in a company and are sold as shares

• Bonds are a type of loan that are repaid with interest and long-term bonds typically earn a higher return than short-term bonds

• Bonds pay a variable rate of interest and offer a way to earn a return as a tax-advantaged investment

• Bonds have no risk. Both government and corporate bonds guarantee a return

Which is true about factors that influence the prices of financial assets?

• Supply and demand is one key driver of price fluctuations of investments

• External factors beyond a company's control such as high unemployment can impact the prices of investments

• New product lines that expand a customer base can increase the value of a company and its stock price

• All of the above

Which is the most likely impact of decreased interest rates?

• Consumers can borrow easier and the price of existing bonds decreases

• The cost of borrowing is more expensive and bond prices tend to decrease

• Consumers can borrow easier and the overall cost of real estate will increase

• The cost of borrowing is more expensive and the price of real estate will decrease

If you wanted a well-balanced portfolio for the long term with some income producing assets, what would you choose?

• 100% stocks

• 100% bonds

• 90% stocks and 10% cash

• 50% stocks and 50% bonds

Mutual funds are a way to invest in a bundle of assets, including stocks and bonds, to provide a diversified investment that has lower risk than investing in a single asset.

• True

• False

Which is NOT a factor that typically impacts the management fees of a mutual fund?

• Active versus passive management

• Historical performance of the mutual fund

• Mutual fund size

• Asset classes within the mutual fund