Investing 101

Which type of stock is issued by a company with a solid performance history?

Income

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Blue chip

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Growth

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Defensive

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True or False: You should be debt free before you start an investment strategy.

True

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False

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What does “fiduciary” mean?

A financial advisor makes a commission off your investments

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A financial advisor makes no commission off your investments

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A financial advisor must give advice based on your best interest

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A financial advisor is certified to provide qualified financial advice

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Which period of compounding will provide the highest rate of growth?

Daily

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Monthly

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Quarterly

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Annually

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What is the “par value” of an investment?

The average amount of interest you can expect to earn

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The amount you initially invest

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The base value of that investment

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The value of the investment, minus fees and costs

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What benefit do Index Funds provide when you invest in mutual funds?

A certified financial advisor picks index investments for you daily

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Fees and costs tend to be lower since it tracks an index

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Funds are indexed regularly to reduce risk

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You invest with a group of other investors since assets are pooled

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Which type of U.S. Treasury investment counts as a cash equivalent?

T-Bill

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T-Bond

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EE Bond

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I Bond

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True or False: Your checking account is actually a type of investment

True

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False

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When is the right time to take on more risk when you’re investing?

Right before retirement, so you can build the remaining assets you need

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After you’ve purchased your first home

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When you’re just starting out with investing after college

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When the economy is in a bull market

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What is the “expense ratio” of a mutual fund?

The percentage of fund assets that are used to cover ongoing expenses

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The commission charged by the broker for selling you shares

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The cost of entering into a mutual fund

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The par value investment you make into a mutual fund

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Investing 101

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