Quiz 2: Investing Fundamentals

Question 1: What does "diversification" mean in investing?

a) Investing all your money in one company

b) Spreading your investments across various assets

c) Investing only in high-risk stocks

d) Investing only in low-risk bonds

Question 2: Which of these is generally considered a high-risk investment?

a) Savings account

b) Government bonds

c) Individual stocks

d) Certificate of Deposit (CD)

Question 3: What is a P/E ratio?

a) Price-to-Earnings ratio, used to value a company

b) Profit-to-Expense ratio, used to measure efficiency

c) Portfolio-to-Equity ratio, used to assess risk

d) Production-to-Earnings ratio, used in manufacturing