MCQ Questions
Q.1.
What is the primary reason to issue stock?
  • 0%
    b. the value of the investment may be hard to predict.
  • 100%
    b. To raise money to grow the company
  • 0%
    b. The issuer will pay you back, plus interest.
  • 0%
    b. To build new roads or bridges.
Q.2.
Generally speaking, the _______ the risk, the _______ the potential return or loss.
  • 0%
    c. Savings Accounts
  • 0%
    d. Both A and B
  • 100%
    b. higher; higher
  • 0%
    d. All of the above
Q.3.
When you buy a ____ , you are loaning money to an organization.
  • 0%
    d. Both A and B
  • 0%
    b. Stocks allow investors to own a portion of the company; bonds are loans to thecompany.
  • 100%
    b. Bond
  • 0%
    c. At the earliest possible date.
Q.4.
________ are typically comprised of a mix of ________ and ________.
  • 0%
    b. To raise money to grow the company
  • 0%
    c. At the earliest possible date.
  • 100%
    c. Mutual funds; stocks; bonds
  • 0%
    b. To build new roads or bridges.
Q.5.
If an employer does not offer a retirement plan, what might be another way to save for retirement?
  • 0%
    b. higher; higher
  • 0%
    d. All of the above
  • 0%
    d. Both A and B
  • 100%
    b. Bond
Q.6.
If an investment is considered "volatile", it means...
  • 0%
    b. The issuer will pay you back, plus interest.
  • 0%
    b. To raise money to grow the company
  • 0%
    a. It helps you to balance your risk across different types of investments.
  • 100%
    b. the value of the investment may be hard to predict.
Q.7.
When it comes to investing, what is the typical relationship between risk and return?
  • 0%
    a. A bond typically pays a fixed, predictable amount of interest each year.
  • 0%
    c. Treasury bond − Diversified mutual fund - Stock
  • 100%
    b. The greater the potential risk, the greater the potential return.
  • 0%
    b. The issuer will pay you back, plus interest.
Q.8.
Which of the following correctly orders the investments from LOWER risk to HIGHERrisk?
  • 50%
    b. The greater the potential risk, the greater the potential return.
  • 0%
    a. A portfolio of with a high percentage of stocks.
  • 0%
    c. Treasury bond − Diversified mutual fund - Stock
  • 50%
    c. A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
Q.9.
What are dividends?
  • 0%
    b. The issuer will pay you back, plus interest.
  • 100%
    c. A distribution of a small percentage of profits to shareholders.
  • 0%
    b. By investing their earnings back into their original investment
  • 0%
    c. A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
Q.10.
Diversification is important in investing because...
  • 0%
    b. Stocks allow investors to own a portion of the company; bonds are loans to thecompany.
  • 0%
    b. the value of the investment may be hard to predict.
  • 0%
    b. By investing their earnings back into their original investment
  • 100%
    a. It helps you to balance your risk across different types of investments.
Q.11.
When might be the best time to start saving for retirement?
  • 0%
    c. Savings Accounts
  • 0%
    b. To build new roads or bridges.
  • 100%
    c. At the earliest possible date.
  • 0%
    b. To raise money to grow the company
Q.12.
Which investment type typically carries the least risk?
  • 100%
    c. Savings Accounts
  • 0%
    c. At the earliest possible date.
  • 0%
    d. All of the above
  • 0%
    b. Stocks allow investors to own a portion of the company; bonds are loans to thecompany.
Q.13.
Why might a town decide to issue bonds?
  • 0%
    b. To raise money to grow the company
  • 0%
    c. At the earliest possible date.
  • 0%
    b. The issuer will pay you back, plus interest.
  • 100%
    b. To build new roads or bridges.
Q.14.
How can investors receive compounding returns?
  • 0%
    b. The issuer will pay you back, plus interest.
  • 100%
    b. By investing their earnings back into their original investment
  • 0%
    b. the value of the investment may be hard to predict.
  • 0%
    b. To raise money to grow the company
Q.15.
Which of the following would be considered the highest risk portfolio?
  • 0%
    c. Treasury bond − Diversified mutual fund - Stock
  • 0%
    c. A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
  • 100%
    a. A portfolio of with a high percentage of stocks.
  • 0%
    b. Stocks allow investors to own a portion of the company; bonds are loans to thecompany.