Investment (Investor's Knowledge) 3

Question 1

An ETF differs from a mutual fund primarily because it:

Accepted Answer

Trades on exchanges throughout the day

Answer

Is always actively managed

Answer

Cannot hold stocks

Answer

Has no expense ratio

Question 2

A bond's price typically moves in which direction when interest rates rise?

Accepted Answer

Down

Answer

Up

Answer

Stays flat

Answer

Doubles

Question 3

What is an investor's 'risk tolerance'?

Accepted Answer

Their willingness and ability to endure losses

Answer

The maximum legal investment limit

Answer

A broker's commission rate

Answer

The tax rate on gains

Question 4

Which is a characteristic of a blue-chip stock?

Accepted Answer

Large, established, financially sound company

Answer

Newly listed startup

Answer

Penny stock under $1

Answer

Unregistered private security

Question 5

Asset allocation refers to:

Accepted Answer

Dividing a portfolio among asset classes

Answer

Picking a single best stock

Answer

Timing the market daily

Answer

Avoiding all bonds

Question 6

A dividend is:

Accepted Answer

A share of profits paid to shareholders

Answer

A loan from the company

Answer

A type of capital gain

Answer

A brokerage fee

Question 7

Liquidity describes how easily an asset can be:

Accepted Answer

Converted to cash without major loss

Answer

Insured against theft

Answer

Inherited tax-free

Answer

Leveraged with margin