1. Which of the following would be the safest investment, where there is NO chan

Question

1. Which of the following would be the safest investment, where there is NO chance of losing your money?
A. savings account
B. mutual fund
C. municipal bond
D. low risk stock
2. Using the rule of 72, how long would it take to double your money, if you were receiving an interest rate of 4%?
A. 18 years
B. 4 years
C. 72 years
D. 12 years
3. Owning stock is owning a small piece of a company.
A. true
B. false
4. A collection of investments that is professionally managed is called a mutual fund.
A. true
B. false
5. Loans to companies, cities, or states that usually pay a specified interest rate are called:
A. stocks
B. bonds
C. mutual funds
D. money markets
6. Which of the following is NOT an advantage of buying mutual funds?
A. You can start with a small amount
B. You reduce your risk
C. You always make money
D. You have a variety of companies
7. Which of the following is NOT a choice in deciding what to do with dividends?
A. take cash dividends
B. reinvest the dividends
C. refuse the dividends
8. Reinvesting dividends allows you to:
A. buy more shares of your original investment
B. buy more shares of another company you are interested in
C. receive dividend checks
D. none of the above
9. Which of the following is the most popular indicator of how the stock market changes day to day?
A. Consumer Price Index
B. People magazine
C. Dow Jones Industrial Average
D. Book of lists
10. A percentage that represents the yearly increase in prices of things you buy is called:
A. Cost factor
B. Price jump
C. Inflation
D. Deflation

Explanation / Answer

1. A 2. A 3. C 4. D 5 B 6 A 7 C 8 C 9B 10 D

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