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
A diversified portfolio is best described as one that:
Answer: Spreads investments across varied assets
Diversification spreads investments across different assets to reduce overall risk.
Which account offers tax-free qualified withdrawals in retirement?
Answer: Roth IRA
Roth IRA contributions are made after-tax, so qualified withdrawals in retirement are tax-free.
Compound interest differs from simple interest because it:
Answer: Earns interest on interest
Compound interest earns returns on both the principal and previously accumulated interest.
An index fund aims to:
Answer: Match a market index's performance
Index funds passively track and replicate the performance of a market index.
What is liquidity in investing?
Answer: How easily an asset converts to cash
Liquidity measures how quickly and easily an asset can be converted to cash without losing value.
A blue-chip stock is typically:
Answer: A large, established, financially sound company
Blue-chip stocks are shares of large, well-established, financially stable companies.
Asset allocation primarily refers to:
Answer: Dividing investments among asset categories
Asset allocation is the strategy of dividing a portfolio among stocks, bonds, and other categories.