Test Your Investing IQ

Test Your Investing IQ

How much do you know about market basics? Put your investing IQ to the test with this quiz on stocks, bonds, and mutual funds.




1. What does it mean to buy stock in a company?

   a. The investor loans money to the company

   b. The investor becomes a part owner of the company

   c. The investor is liable for the company’s debts


2. Which of the following statements about stock indexes is correct?

   a. A stock index is an indicator of stock price movements

   b. There are many different types of stock indexes

   c. They can be used as benchmarks to compare the performance of an individual investment to a group of its peers

   d. All of the above


3. What is a bond?

   a. An equity security

   b. A nonnegotiable note

   c. A debt investment in which an investor loans money to an entity


4. What kind of bond pays no periodic interest?

   a. Zero-coupon

   b. Floating-rate

   c. Tax-exempt


5. What is a mutual fund?

   a. A portfolio of securities assembled by an investment company

   b. An investment technique of buying a fixed dollar amount of a particular investment regularly

   c. A legal document that provides details about an investment


6. What is the difference between mutual fund share classes?

   a. The investment advisers responsible for managing each class

   b. The investments each class makes

   c. The fees and expenses charged by each fund class


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