Investment MCQ Flashcards
7 cards from real Investment practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Investment MCQ flashcards as text
Which type of risk can be eliminated through diversification?
Answer: Unsystematic risk
Unsystematic (company-specific) risk can be reduced or eliminated by holding a diversified portfolio.
A bond's price and its yield typically have what relationship?
Answer: Inverse (move opposite)
Bond prices and yields move inversely; when yields rise, prices fall and vice versa.
What does P/E ratio measure?
Answer: Price relative to earnings per share
The price-to-earnings ratio compares a stock's price to its earnings per share.
Which investment is generally considered the lowest risk?
Answer: U.S. Treasury bills
U.S. Treasury bills are backed by the federal government and considered virtually risk-free.
Dollar-cost averaging involves:
Answer: Investing fixed amounts at regular intervals
Dollar-cost averaging means investing a fixed amount regularly regardless of price.
What is a mutual fund's NAV?
Answer: Net asset value per share
NAV is the net asset value per share, calculated as total assets minus liabilities divided by shares outstanding.
Beta measures a stock's:
Answer: Volatility relative to the market
Beta measures a stock's volatility or sensitivity relative to overall market movements.