#1
Which of the following is a characteristic of a mutual fund?
Investors directly own the underlying assets
Diversification of investment across multiple securities
Higher risk compared to individual stock investments
Fixed rate of return
#2
Which of the following is NOT a factor to consider when evaluating investment options?
Potential returns
Tax implications
Current fashion trends
Risk level
#3
Which of the following is a characteristic of a bond?
Represents ownership in a corporation
Typically offers a fixed interest rate
Traded on stock exchanges
High potential for capital growth
#4
What does the term 'ROI' stand for in the context of investments?
Rate of Interest
Return on Investment
Risk of Investment
Rate of Inflation
#5
Which of the following is NOT a type of investment account?
401(k)
Roth IRA
Checking account
Brokerage account
#6
Which of the following investment options typically offers the highest potential returns?
Savings Account
Certificate of Deposit (CD)
Stocks
Bonds
#7
What is the main advantage of investing in real estate compared to other investment options?
High liquidity
Potential for steady income through rent
Low risk
Guaranteed returns
#8
When considering risk in investments, which of the following is generally true?
Higher-risk investments always provide higher returns
Higher-risk investments always result in losses
Higher-risk investments may provide higher returns, but with increased risk of losses
Lower-risk investments always provide higher returns
#9
What is the concept of 'diversification' in investing?
Investing in a single asset class
Spreading investments across different assets to reduce risk
Investing only in high-risk assets
Investing in assets with guaranteed returns
#10
What is the purpose of an index fund?
To invest in a specific industry sector
To track the performance of a specific index
To provide guaranteed returns
To invest in emerging markets
#11
Which of the following is NOT a type of investment risk?
Market risk
Inflation risk
Credit risk
Guaranteed returns
#12
What is the primary difference between an ETF and a mutual fund?
ETFs are actively managed, while mutual funds are passively managed
ETFs are traded on exchanges like stocks, while mutual funds are not
ETFs have higher fees compared to mutual funds
ETFs are only available to institutional investors
#13
What is the key benefit of a 401(k) retirement plan?
Higher returns compared to other retirement plans
Employer match on contributions
Tax-free withdrawals at retirement
No penalties for early withdrawal
#14
What is the general rule of thumb for asset allocation based on age?
Invest more aggressively when young and more conservatively as you age
Invest conservatively when young and more aggressively as you age
Asset allocation is not dependent on age
Invest the same amount in all asset classes at all ages
#15
What is the main advantage of a 403(b) retirement plan?
Higher contribution limits compared to other retirement plans
Employer match on contributions
Tax-free withdrawals in retirement
No penalties for early withdrawal
#16
Which of the following is a characteristic of a 457(b) retirement plan?
Available only to government employees
Contributions are tax-deductible
No penalties for early withdrawal
Employer match on contributions