Investment Basics

Everyone wants to know the secret to successful investments. In this section you will learn about the different types of investments and how feelings about risk may affect investment choices.

Key Concepts

  • What is an investment?
  • Why is investing important to me?
  • Where do I invest my money?

Investment Definition Quiz

Test your investment knowledge!

Answer the following questions to test your investment knowledge. Questions 1-5 are true or false and questions 6-9 are multiple choice. Don’t worry if you get a question wrong! This quiz is intended to help you learn investment basics. You can email your results upon completion.

  • Questions 1-5 are True or False. Choose the correct definitions:
  • An investment is the purchase of an asset with an expectation of receiving more money than what you paid for it.
  • An investment return is the profit or loss you have on your investments, including income received and change in value.
  • An expected return is the return you are guaranteed when an initial investment is made.
  • Hard assets are assets that are not cash, stocks, or bonds.
  • A mutual fund is a professionally managed investment that pools money from many investors to invest in a variety of securities.
  • Questions 6-9 are multiple choice:
  • Which of these can affect risk?
  • Which of the following is NOT a cash account?
  • A stock is a type of security/investment that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings. Which of the following is a type of stock?
  • A bond is a debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time. This borrowed money is used by companies and governments to finance a variety of projects and activities. Which of the following is not a bond?

Investment Definitions – Download HERE