Investment Investment MCQ 2

Question 1

Which type of risk can be eliminated through diversification?

Accepted Answer

Unsystematic risk

Answer

Systematic risk

Answer

Market risk

Answer

Interest rate risk

Question 2

A bond's price and its yield typically have what relationship?

Accepted Answer

Inverse (move opposite)

Answer

Direct (move together)

Answer

No relationship

Answer

Always equal

Question 3

What does P/E ratio measure?

Accepted Answer

Price relative to earnings per share

Answer

Profit relative to expenses

Answer

Price relative to equity

Answer

Payout relative to earnings

Question 4

Which investment is generally considered the lowest risk?

Accepted Answer

U.S. Treasury bills

Answer

Common stock

Answer

Corporate bonds

Answer

Real estate

Question 5

Dollar-cost averaging involves:

Accepted Answer

Investing fixed amounts at regular intervals

Answer

Investing a lump sum at once

Answer

Timing the market peaks

Answer

Selling during downturns

Question 6

What is a mutual fund's NAV?

Accepted Answer

Net asset value per share

Answer

Net annual value

Answer

Nominal average yield

Answer

New acquisition value

Question 7

Beta measures a stock's:

Accepted Answer

Volatility relative to the market

Answer

Dividend growth rate

Answer

Earnings stability

Answer

Book value