| Are you up to speed on investment basics and | | | | to each question. Consider this your first investor |
| investing strategies? Test yourself. Perhaps it's | | | | lesson. |
| time you learn to invest. Answer true or false to | | | | Question #1: Stocks are equity investments, |
| the following questions, the correct answers | | | | representing ownership. Bonds represent debt. |
| follow. Your first investment lesson also follows | | | | Question #2: When interest rates go up, bond |
| the quiz. | | | | prices or values go down, and bond owners lose |
| 1. Stocks and bonds are both equity investments. | | | | money. |
| 2. Bonds are poor investments when interest | | | | Question #3: High and rising interest rates have a |
| rates are rising. | | | | negative effect on corporate profits. This tends |
| 3. High and rising interest rates are usually good | | | | to send stock prices down. |
| for the stock market. | | | | Question #4: The three basic types of mutual |
| 4. The three basic types of mutual funds are | | | | funds are money market funds, bond funds, and |
| growth funds, income funds, and stock funds. | | | | stock funds. Balanced funds might be considered |
| 5. Most Americans invest most of their 401(k) | | | | the fourth basic type, and they invest in stocks, |
| assets in mutual funds. | | | | bonds, and money market securities. |
| 6. Stock funds are riskier than bond funds and | | | | Question #5: Mutual funds are the lion's share of |
| pay higher dividends. | | | | the investment options offered in typical 401(k) |
| 7. Portfolio rebalance and dollar cost averaging are | | | | plans. Most 401(k) investors allocate most of their |
| sound investing strategies for average investors. | | | | plan assets to them. |
| 8. Money market funds invest in stocks, bonds, | | | | Question #6: Bond funds pay higher dividends. |
| and short-term debt. | | | | Question #7: Portfolio rebalance and dollar cost |
| 9. Real estate investing usually involves financial | | | | averaging are valuable investing tools or strategies |
| leverage which acts to enhance safey. | | | | for average investors. |
| 10. You can indirectly have an investment in gold | | | | Question #8: Money market funds invest in |
| by owning shares in a specialty mutual fund. | | | | high-quality short term debt, money market |
| Tally your score. Only questions two, five, seven, | | | | securities. |
| and ten are true. If you only missed one or two | | | | Question #9: Financial leverage means borrowing |
| answers, you know some investment basics. | | | | money, which is typical in real estate investing. |
| Even so, you probably need to learn to invest | | | | This increases potential returns, but increases risk |
| using proven investing strategies. If you missed | | | | to the investor. |
| three or four you need to learn investment basics | | | | Question#10: By owning shares in a specialty |
| and investing strategies. If you missed five or | | | | mutual fund, a gold fund, you can profit as the |
| more you need to get busy and learn to invest. | | | | price of gold rises. |
| Here's a brief explanation of the correct answer | | | | |