Investing and Finance Quiz

Quiz

1. The strategy of investing in different kinds of assets to reduce risk is called:

  • Bi-polar investing
  • Dollar cost averaging
  • Diversification

2. The interest rate the Federal Reserve charges banks for short-term loans is the:

  • Discount rate
  • Prime rate
  • Periodic rate

3. In addition to setting interest rates, the Federal Reserve affects monetary policy through open market operations, which are the:

  • Buying or selling of U.S. government securities
  • Cash reserves each bank must keep on hand to satisfy consumer demand
  • Annual review of all stock market regulations, required by Congress

4. Beta measures the:

  • Volatility of a particular stock
  • Stability of a nation's monetary system
  • Financial worthiness of a company

5. Many financial advisers recommend DRIPs, which are:

  • Depreciating real income portfolios
  • Debt reduction incentive programs
  • Dividend reinvestment plans

6. When purchasing corporate bonds, investors:

  • Receive stock paying a fixed dividend
  • Earn tax-free interest income
  • Are making a loan to the company

7. A zero coupon bond would:

  • Not require a sales charge
  • Pay no interest until it matured
  • Be sold by the U.S. Treasury Department

8. The primary purpose of the International Monetary Fund is to:

  • Promote international monetary cooperation
  • Serve as a bank for the United Nations
  • Ensure that interest rates are the same in member nations

9. Offshore banks are:

  • Located in Caribbean nations
  • Exempt from International Monetary Fund regulation
  • Licensed by countries with minimal taxation and financial regulations

10. A brass plate bank is:

  • An established, blue chip institution
  • A bank authorized to sell insurance
  • A bank with no offices

1. The strategy of investing in different kinds of assets to reduce risk is called:
Diversification

2. The interest rate the Federal Reserve charges banks for short-term loans is the:
Discount rate

3. In addition to setting interest rates, the Federal Reserve affects monetary policy through open market operations, which are the:
Buying or selling of U.S. government securities

4. Beta measures the:
Volatility of a particular stock

5. Many financial advisers recommend DRIPs, which are:
Dividend reinvestment plans

6. When purchasing corporate bonds, investors:
Are making a loan to the company

7. A zero coupon bond would:
Pay no interest until it matured

8. The primary purpose of the International Monetary Fund is to:
Promote international monetary cooperation

9. Offshore banks are:
Licensed by countries with minimal taxation and financial regulations

10. A brass plate bank is:
A bank with no offices

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