INVESTING-NGPF1

Question 1

How can you make money on stocks?

Accepted Answer

Selling at a higher price, Dividends

Question 2

Which two accurately describe asset allocation?

Accepted Answer

Dividing among different asset categories based on time, Dividing among different asset categories based on risk

Question 3

What is the only retirement plan that requires that you pay taxes now (not when you withdraw)?

Accepted Answer

Roth IRA

Question 4

If interest rates rise, what will typically happen to bond prices?

Accepted Answer

Fall

Question 5

Which of the following accurately describes a difference between a bond and a bond fund?

Accepted Answer

A bond is considered to be a less diversified investment than a bond fund

Question 6

What is the income made from investments called?

Accepted Answer

A capital gain

Question 7

The relationship between risk and return can be stated as

Accepted Answer

Higher risk indicates higher return

Question 8

What are the primary differences between index funds (IF) & actively managed funds (AMF)?

Accepted Answer

IF try to track performance of a particular index, AMF typically carry higher costs (expense ratios)than IF, IF goal is to achieve the market average, The goal of an AMF is to earn a higher return than the market, AMF try to outperform their benchmark & peer group average

Question 9

How is a bond different from a stock?

Accepted Answer

A bond is a loan you give to a company, a stock is partial ownership

Question 10

Putting regular amounts of money into an investment account at specific time intervals is

Accepted Answer

Dollar cost averaging

Question 11

Which is NOT a good reason to buy a stock fund like the S&P 500?

Accepted Answer

You want to "beat the market"

Question 12

The face value of a bond is called...

Accepted Answer

Par Value

Question 13

Which would be considered the highest risk investment type?

Accepted Answer

Stock

Question 14

True/False: Investing in a diversified portfolio of stocks guarantees you will not lose money.

Accepted Answer

False

Question 15

Why is it important to start investing as soon as possible?

Accepted Answer

You have more time for your money to compound

Question 16

Which is NOT an example of an asset class?

Accepted Answer

Capital Gains

Question 17

Your money remains tax-deferred in these accounts until you withdraw (taxed as income).

Accepted Answer

Traditional IRA, Pension, 401(k)

Question 18

Which is NOT a stock market index?

Accepted Answer

New York Stock Exchange

Question 19

This is a characteristic human investment managers have that robo-advisors do not

Accepted Answer

Personal Touch

Question 20

Target Date Funds (TDFs) will automatically adjust your asset allocation based on the retirement year chosen.

Accepted Answer

True

Question 21

What is a brokerage account used for?

Accepted Answer

It's a type of account that you use to buy/sell stocks, bonds, and funds

Question 22

The time period one expects to hold an investment is called

Accepted Answer

Time horizon

Question 23

Why is compound interest more beneficial than simple interest?

Accepted Answer

Your money grows faster when it is compounded, You earn interest on your interest

Question 24

A diversified portfolio is desirable because

Accepted Answer

It decreases risk

Question 25

A key difference between saving and investing is

Accepted Answer

Savings is for emergencies & goals, investing is long-term wealth

INVESTING-NGPF1

Questions 25

INVESTING-NGPF1

Questions 25