Investing

Question 1

An investment which represents ownership in a company

Answer 1

Stock

Question 2

A lower risk way to invest in the stock market - a collection of several different types of stocks

Answer 2

Mutual Fund

Question 3

An investment where you loan your money to a bank or a government and they pay you back later with interest.

Answer 3

Bond

Question 4

What type of fund acts like a mutual fund but is traded like a stock?

Answer 4

ETF (Exchange Traded Fund)

Question 5

What type of fund tracks the S&P 500 and tries to match its performance?

Answer 5

Index Fund

Question 6

True/False: The S&P 500 is an index (list) of 500 of the largest US companies

Answer 6

True

Question 7

True/False: A passively managed fund has high fees.

Answer 7

False. Actively managed funds have high fees, because they have fund managers making the investment decisions.

Question 8

True/False: An index fund is usually passively managed, so has lower fees.

Answer 8

True

Question 9

**

When you own stock in a company and the company makes money, they might pay you a:

Answer 9

Dividend. These are either given to you in cash or in the form of more stock.

Question 10

True/False: Investing is more risky than saving, but can make you more money.

Answer 10

True.

Question 11

True/False: Speculating is lower risk than investing

Answer 11

False. Speculating is usually short term and/or high risk (examples are crypto and collectibles)

Question 12

An alternative investment where you buy gold, jewelry or coins and hope the value goes up over time

Answer 12

Commodities

Question 13

In order to invest in the stock market, you must open this type of account:

Answer 13

Brokerage