Investment Fundamentals Test

Question 1

The majority of _________ ETFs "reset" everyday, which means they are made to accomplish their investment goal every day.

Accepted Answer

Leveraged

Answer

Sector

Answer

Dividend

Answer

Conventional

Question 2

If you purchase stock in a corporation...

Accepted Answer

You have equity in the business.

Answer

You gave the business a loan of money.

Answer

You are responsible for the business' debts.

Answer

The business will pay you interest on your initial investment back.

Question 3

If you purchase a corporate bond...

Accepted Answer

You gave the business a loan of money.

Answer

You are responsible for the business' debts.

Answer

Shareholder resolutions are up for election.

Answer

You have equity in the business.

Question 4

What kind of bond is the most secure?

Accepted Answer

US. Treasury bond

Answer

Municipal bond

Answer

Corporate bond

Answer

Don't know/Not sure

Question 5

Which of the following best describes what a "junk bond" is?

Accepted Answer

A bond that rating agencies have deemed to be "below investment-grade"

Answer

A bond whose value has sharply decreased

Answer

Bond that has fallen into default

Answer

Bonds not subject to regulation

Question 6

Which of the following entities offers protection against stock market losses?

Accepted Answer

None of the above

Answer

SEC (Securities and Exchange Commission)

Answer

SIPC (Securities Investor Protection Corporation)

Answer

FINRA (Financial Industry Regulatory Authority)

Question 7

What examples of ownership investments are the following:

Accepted Answer

Collectibles and real estate

Answer

Savings accounts and stocks

Answer

Stocks and bonds

Answer

Certificates of deposit and bonds