Investment Test 3

Question 1

What does the P/E ratio measure?

Accepted Answer

Price relative to earnings per share

Answer

Profit margin

Answer

Dividend yield

Answer

Debt to equity

Question 2

Which investment is generally considered the safest in the US?

Accepted Answer

US Treasury securities

Answer

Corporate bonds

Answer

Small-cap stocks

Answer

Cryptocurrency

Question 3

What is dollar-cost averaging?

Accepted Answer

Investing a fixed amount at regular intervals

Answer

Buying only when prices are low

Answer

Selling in a downturn

Answer

Converting currency

Question 4

A stock has a beta of 1.5. If the market rises 10%, what is the expected move?

Accepted Answer

Up 15%

Answer

Up 10%

Answer

Up 5%

Answer

Down 15%

Question 5

What is an ETF?

Accepted Answer

An exchange-traded fund

Answer

A type of bond

Answer

An employer tax form

Answer

A futures contract

Question 6

Which of these is a characteristic of preferred stock?

Accepted Answer

Priority over common stock for dividends

Answer

Voting rights always

Answer

Highest growth potential

Answer

No dividends

Question 7

What does liquidity refer to in investing?

Accepted Answer

How quickly an asset can be converted to cash

Answer

The dividend rate

Answer

The level of debt

Answer

The tax rate