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What Do You Know About Investing?

1.	A share of a company's stock represents:
a.		A stake in a company's profits
b.		A stake in the company itself
c.		A way for you to participate in a company's future growth
d.		All of the above
2.	A bond is:
a.		An IOU
b.		An ownership stake
c.		A form of cash
3.	A mutual fund is:
a.		A large group of stocks managed by a cooperative of shareholders
b.		A portfolio that always includes stocks, bonds and cash investments
c.		A portfolio of investments, run by professional money managers, in which individuals may hold shares
4.	What are the building blocks of a diversified investment portfolio?
a.		Stocks
b.		Cash and stocks
c.		Cash, bonds and stocks
d.		Cash and bonds
5.	What's the most important long-term factor that drives a stock's price up or down?
a.		News reports
b.		Earnings
c.		Internet message boards
6.	In a bear market, all stocks go down.
a.		True
b.		False
7.	Stocks always outperform bonds.
a.		True
b.		False
8.	You can never lose money in the bond market.
a.		True
b.		False
9.	The safest bonds are:
a.		High-yield bonds
b.		Municipal bonds
c.		U.S. Treasury bonds
10.	When interest rates rise, bond prices:
a.		Rise
b.		Fall
c.		Stay the same
11.	What should you consider in determining a mutual fund's performance?
a.		The portfolio manager
b.		The type of investments it holds
c.		Fund fees and expenses
d.		All of the above
12.	Index funds:
a.		Seek to invest in the same securities that make up a specific stock or bond benchmark.
b.		Try to beat the investment return of a specified stock or bond benchmark.
c.		Buy only stocks in Standard & Poor's 500 Stock Index.
13.	A mutual fund "sales load" is:
a.		A commission
b.		A dividend check
14.	"Dollar cost averaging" is:
a.		A plan that lets the IRS deduct your tax payments from your mutual funds
b.		A method of calculating the future stock price of companies
c.		An automatic program buying you the same dollar amount of mutual fund shares at regular intervals

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