This investment, called a bond, is a loan obligation, usually from a company, or from this.
What is a government entity?
100
Of these 3 asset classes, Stocks, Bonds and Cash, this one provides the least amount of return and the least amount of risk.
What is cash?
100
In choosing a financial advisor, one must always ensure that the advisor (and their firm) is experienced, reputable and trustworthy. Is this information readily available?
What is yes? (Through online tools and references)
100
In typical investment situations, if an investment represents greater levels of risk, it should also deliver this.
What is a greater likelihood of a greater return on investment?
200
This investment (or asset class) is less volatile than stocks.
What is bonds, or cash?
200
When a company goes bankrupt, bond holders are paid before owners of this.
What are stock, or share owners?
200
Of these 3 asset classes: Stocks, Bonds and Cash, this one provides the greatest return and greatest volatility (risk) over time.
What is a stock?
200
This is the most important first step that a financial advisor outlines with a client.
What is development of an investment plan, or roadmap?
200
In what ways can an investor minimize and manage his/her overall risk?
What is implement a sound asset allocation?
300
Over time, this asset class has grown more than cash and bonds.
What are stocks (or equities)?
300
This asset class, or investment, is very sensitive to changes in interest rates.
What is a bond?
300
The most important decision an investor makes, with regard to his/her investment portfolio, is this.
What is asset allocation?
300
One advisor recommends investments that you are qualified to own, while another recommends only the investments that are in your best interest. Which of the advisors is acting as a fiduciary on your behalf?
Who is the advisor that always acts in your best interest?
300
When an investor buys a stock, the price of that stock can fall all the way to here.
What is to zero?
400
This is the most widely followed U.S. Stock Market index, as it is a broader gauge of the U.S. Stock Market than the Dow Industrials average.
What is the S&P 500 Index?
400
If a bond issuer does not default, and the bond is held to maturity, the bond owner is paid this at maturity.
What is the 'par' value of the bond?
400
For a younger investor with a long time horizon and no immediate need for liquidity, which of the 3 asset allocations below would likely be the best?
100% diversified stock portfolio
100% bond portfolio
100% cash, in the bank or in a mattress
What is a 100% diversified stock portfolio?
400
An investment advisor approaches you with an offer that sounds too good to be true. Your reaction should be what?
What is decline the offer, ask for more information and seek out a trusted professional's opinion on the offer before making a final decision.
400
When an investor buys a bond, and that bond issuer does NOT default on that bond, the investor is going to get this back at the bonds maturity.
What is par value of the bond?
500
Stock investors seek a share of profits paid through this...
What are dividends and capital appreciation?
500
When interest rates rise, bond prices typically do this
What is fall, or lose value?
500
Correlation is a measure of how two assets move in relation to one another. Which of these examples would suggest NEGATIVE correlation? Suntan lotion and sunglasses, suntan lotion and umbrellas, or suntan lotion and peanut butter?
What is suntan lotion and umbrellas?
500
A financial advisor 'guarantees' a certain rate of return for an investment in an opportunity that his/her firm is representing. Should that advisor be trusted?
What is no, as there are no 'guaranteed' returns for any investment (even money market funds, as we saw in 2009!).
500
If a stock is bought for $100, then loses 50% of its value on day 1, and then appreciates by 50% on day 2, the stock is now worth this: $100, $75 or $60.