FUNDAMENTALS OF INVESTING ACTUAL
TEST PAPER UPDATED COMPLETE
QUESTIONS WITH VERIFIED ANSWERS
●● Portfolio
Answer: A collection of different investments.
●● Return
Answer: Reward from investing, which includes income from
investment and increase in value of investment.
●● Securities
Answer: Investments issued by firms, governments, or other
organizations that represent a financial claim on the issuer's resources.
●● Liquidity
Answer: The ability to buy and sell quickly.
●● Property
Answer: Real assets that are typically less liquid than securities.
●● Real Property
,Answer: Land, buildings, and things permanently affixed to the land.
●● Tangible Personal Property
Answer: Assets such as gold, artwork, antiques, and collectibles.
●● Direct Investment
Answer: Investor directly acquires a claim/ownership.
●● Indirect Investment
Answer: Investor indirectly acquires a claim/ownership via a
professional investment manager.
●● Debt Securities
Answer: Investor lends funds in exchange for interest income and
repayment of loan in future (bonds).
●● Equity Securities
Answer: Ongoing ownership in a business or property (common stocks).
●● Derivative Securities
Answer: Neither debt nor equity; derive value from an underlying asset
(options).
, ●● Risk
Answer: Uncertainty surrounding the return that a particular investment
will generate.
●● Low-Risk Investments
Answer: More predictable, lower average return.
●● High-Risk Investments
Answer: Less predictable, higher average return.
●● Diversification
Answer: Holding different types of assets in an investment portfolio.
●● Short-Term Investments
Answer: Maturities of one year or less.
●● Long-Term Investments
Answer: Maturities of longer than one year.
●● Domestic Securities
Answer: Securities issued by domestic companies.
TEST PAPER UPDATED COMPLETE
QUESTIONS WITH VERIFIED ANSWERS
●● Portfolio
Answer: A collection of different investments.
●● Return
Answer: Reward from investing, which includes income from
investment and increase in value of investment.
●● Securities
Answer: Investments issued by firms, governments, or other
organizations that represent a financial claim on the issuer's resources.
●● Liquidity
Answer: The ability to buy and sell quickly.
●● Property
Answer: Real assets that are typically less liquid than securities.
●● Real Property
,Answer: Land, buildings, and things permanently affixed to the land.
●● Tangible Personal Property
Answer: Assets such as gold, artwork, antiques, and collectibles.
●● Direct Investment
Answer: Investor directly acquires a claim/ownership.
●● Indirect Investment
Answer: Investor indirectly acquires a claim/ownership via a
professional investment manager.
●● Debt Securities
Answer: Investor lends funds in exchange for interest income and
repayment of loan in future (bonds).
●● Equity Securities
Answer: Ongoing ownership in a business or property (common stocks).
●● Derivative Securities
Answer: Neither debt nor equity; derive value from an underlying asset
(options).
, ●● Risk
Answer: Uncertainty surrounding the return that a particular investment
will generate.
●● Low-Risk Investments
Answer: More predictable, lower average return.
●● High-Risk Investments
Answer: Less predictable, higher average return.
●● Diversification
Answer: Holding different types of assets in an investment portfolio.
●● Short-Term Investments
Answer: Maturities of one year or less.
●● Long-Term Investments
Answer: Maturities of longer than one year.
●● Domestic Securities
Answer: Securities issued by domestic companies.
