Course Catalog > Financial Planning > Courses
Financial Planning Courses: Investments

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
One of the risks of investing in bonds is interest rate risk. This means that if interest rates rise, your bond will be earning less than new bonds.
Choose wisely. There is only one correct answer.
True. This is one risk of investing in bonds.
2.
During your working years, what do you need your investments to do the most of for you?
Choose wisely. There is only one correct answer.
Grow. If you are like most people, you will need your investments to grow so that when you are older, you can withdraw sufficient money from them to live on.
3.
As a rule, the longer your time horizon is for investing, the more aggressive you can be with your investments.
Choose wisely. There is only one correct answer.
True. This is due to the fact that you will have more time to recoup losses.
4.
Cash investments, like a savings account, are often used to save for goals like _______.
Choose wisely. There is only one correct answer.
Emergency funds. Because of their easy access and safety, they are a good vehicle to add savings dollars to so you can pay for unexpected emergencies when they occur. Retirement is a long-term goal, and most investors are willing to take some risk with their money to have an opportunity to earn a higher return.
5.
When a company shares some of its profits with its stockholders, what are those profits called?
Choose wisely. There is only one correct answer.
Dividends. Dividends are a cut of a company's profits that are shared with stockholders.
6.
Investment diversification can be accomplished by owning _______.
Choose wisely. There is only one correct answer.
Small, mid-sized, and large company stocks. Owning many different-sized companies provides diversification because they have different characteristics and generally perform differently based on the economic and market conditions.