Finance Quiz

1. What is a mutual fund?
A type of bond
A type of stock
A type of investment fund that pools money from multiple investors to purchase securities
2. What is the difference between a bull market and a bear market?
A bull market is characterized by falling stock prices, while a bear market is characterized by rising stock prices
A bull market is characterized by stable stock prices, while a bear market is characterized by volatile stock prices
A bull market is characterized by rising stock prices, while a bear market is characterized by falling stock prices
3. What is the purpose of financial planning?
To identify financial goals and develop a plan to achieve them
To make money quickly
To invest in high-risk assets
4. What is the purpose of asset allocation?
To invest in a single type of asset
To diversify investments across different types of assets
To invest in high-risk assets
5. What is a budget deficit?
When government spending exceeds government revenue
When government revenue exceeds government spending
When a person spends more than they earn
6. What is the difference between a savings account and a checking account?
A checking account typically earns interest, while a savings account typically does not.
A savings account typically earns interest, while a checking account typically does not.
A savings account and a checking account are the same thing.
7. What is the difference between a limit order and a market order?
A limit order specifies a maximum price to buy or a minimum price to sell, while a market order executes at the current market price.
A market order specifies a maximum price to buy or a minimum price to sell, while a limit order executes at the current market price.
A limit order and a market order are the same thing.
8. What is a stock split?
When a company issues new shares of stock to existing shareholders
When a company reduces the number of shares outstanding
When a company combines multiple shares into a single share
9. What is a bond?
A type of equity security that represents ownership in a company
A type of insurance policy
A type of debt security that represents a loan to a company or government
10. What is an annuity?
A type of stock
A financial product that provides regular payments for a specified period or for life
A type of bond
11. What is a 401(k) plan?
A type of insurance plan
A type of retirement savings plan offered by employers
A type of savings account
12. What is the difference between a credit score and a credit report?
A credit score is a number that represents a person's creditworthiness, while a credit report is a detailed summary of a person's credit history.
A credit report is a number that represents a person's creditworthiness, while a credit score is a detailed summary of a person's credit history.
A credit score and a credit report are the same thing.
13. Which of the following is not a type of financial statement?
Income statement
Balance sheet
Profit and loss statement
14. What is the difference between revenue and profit?
Revenue is the money left after expenses are deducted, while profit is the total amount of money earned.
Revenue is the total amount of money earned, while profit is the money left after expenses are deducted.
Revenue is the total amount of money earned, while profit is the amount of money earned from selling goods.
15. What is the purpose of financial ratio analysis?
To determine a company's financial health and performance
To compare financial data from different companies
To compare financial data from different time periods