Financial Literacy and Investment Basics Quiz

Test your knowledge on investments with these essential questions covering ROI, diversification, asset allocation, and more!

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What is a common measure of a company's profitability?

Revenue

Assets

Net income

Liabilities

1 answered

What does ROI stand for in finance?

Return on Investment

Rate of Interest

Risk of Inflation

Revenue from Operations

1 answered

Which of the following is NOT a type of investment account?

IRA (Individual Retirement Account)

CD (Certificate of Deposit)

401(k) Account

HSA (Health Savings Account)

1 answered

What is the term for the process of spreading investments across various assets to reduce risk?

Concentration

Consolidation

Diversification

Specialization

1 answered

What is the purpose of a 'bull market'?

To signify a period of declining stock prices

To signify a period of rising stock prices

To signify a period of stable stock prices

To signify a period of economic recession

1 answered

What is the primary purpose of diversification in investment?

To maximize returns

To minimize risk

To increase volatility

To concentrate investments

1 answered

What is the term used for a financial instrument representing ownership in a company?

Bond

Stock

Mutual Fund

Derivative

1 answered

What does P/E ratio stand for in finance?

Price/Earnings ratio

Profit/Expense ratio

Percentage/Earnings ratio

Profit/Earnings ratio

1 answered

What is the primary goal of asset allocation in investment?

To minimize taxes

To maximize returns

To manage risk

To diversify income

1 answered

#10

What does the term 'liquidity' refer to in finance?

A company's ability to generate profit

The ease of converting an asset into cash without affecting its price

The amount of debt a company holds

The amount of dividends paid to shareholders

1 answered

#11

Which of the following investment options typically has the highest level of risk?

Government bonds

Savings accounts

Stocks

Certificates of deposit

1 answered

#12

What is the purpose of a 'stop-loss order' in investment?

To limit potential losses by selling a security when it reaches a certain price

To lock in profits by selling a security when it reaches a certain price

To automatically reinvest dividends

To hedge against currency risk

1 answered

#13

Which of the following investment vehicles typically offers the highest potential return?

Savings account

Government bonds

Stocks

Certificates of deposit (CDs)

1 answered

#14

Which of the following investment options typically offers the highest potential return?

Treasury bills

Corporate bonds

Stocks

Savings accounts

1 answered

Financial Literacy and Investment Basics Quiz

What is a common measure of a company's profitability?

What does ROI stand for in finance?

Which of the following is NOT a type of investment account?

What is the term for the process of spreading investments across various assets to reduce risk?

What is the purpose of a 'bull market'?

What is the primary purpose of diversification in investment?

What is the term used for a financial instrument representing ownership in a company?

What does P/E ratio stand for in finance?

What is the primary goal of asset allocation in investment?

What does the term 'liquidity' refer to in finance?

Which of the following investment options typically has the highest level of risk?

What is the purpose of a 'stop-loss order' in investment?

Which of the following investment vehicles typically offers the highest potential return?

Which of the following investment options typically offers the highest potential return?

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