Saving And Investing Question Preview (ID: 32865)
Personal Finance Unit 5 Quiz Review.
TEACHERS: click here for quick copy question ID numbers.
What is compounding interest? (Select the best answer.)
a) interest that's not calculated on a regular basis
b) interest that doubles the principal of an account
c) interest gained only on the principal of an account
d) interest that's added to the principal of an account
Which of the following is a good reason to have a financial reserve that's larger than normal? (Select the best answer.)
a) You would be able to find another job quickly if you lost yours.
b) You have a large monthly car payment.
c) You have mostly discretionary expenses.
d) Your income is fairly predictable.
Which portion would not be part of an investment portfolio? (Select the best answer.)
a) a savings 529 plan
b) commodities funds
c) a savings account
d) equity investments in a company
What is a volatile investment? (Select the best answer.)
a) an investment that can change quickly without warning
b) an investment that is fairly low risk
c) an investment that requires a high volume of investors
d) an investment that gains value slowly over time
What is opportunity cost? (Select the best answer.)
a) the principal in an investment account
b) the total amount of investments in a portfolio
c) the value of an investment opportunity you pass up in order to take another investment opportunity
d) the value of an investment opportunity when it's compared with all the other investments you've made in the past
Which policy is a way the SEC protects investors? (Select the best answer.)
a) requiring companies to disclose financial information
b) guaranteeing the value of certain stocks
c) insuring the amounts of people's investments
d) helping investors diversify their portfolios
What is a stock? (Select the best answer.)
a) a group of real estate investments
b) a regular payment a company issues investors
c) a government investment
d) a partial ownership in a company
What piece of information is most helpful when you're comparing investments? (Select the best answer.)
a) the ROI dollar amounts
b) the total return dollar amounts
c) the initial investment amounts
d) the ROI percentages
How does an equity investor make money? (Select the best answer.)
a) depositing money in compounding accounts
b) lending money and charging interest
c) selling an investment for more than they paid for it
d) selling many investments at the same time
When is your risk tolerance lowest? (Select the best answer.)
a) when you are concerned about the diversity of your investment portfolio
b) when you are closest to needing the money you invested
c) when you are an inexperienced investor
d) when you first make the investment
What is the New York Stock Exchange? (Select the best answer.)
a) an indicator of how certain stocks may perform in the future
b) a stock market where trades take place exclusively over computers
c) an index for measuring the performance of stocks
d) the world's largest exchange for trading stocks and other securities
Which type of investment income happens when an investor sells ownership in an equity investment that's gained value? (Select the best answer.)
a) dividends
b) capital gains
c) interest
d) equity gains
Which piece of information is typically included in a stock listing? (Select the best answer.)
a) the predicted price of the stock over the next year
b) the number of shares of stock sold in a previous day
c) the company's SEC registration credentials
d) the number of shares of stock sold in the previous year
Which example is an investment commodity? (Select the best answer.)
a) a rare painting
b) shares in a company
c) microfinancing
d) steel
Which option allows you to pool your money and invest in a portfolio with other investors? (Select the best answer.)
a) a mutual fund
b) a 401(k) plan
c) a 529 plan
d) an IRA account
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