What does diversification primarily aim to do?

Reduce risk by spreading investments across assets

A share of ownership in a company

A type of government savings bond

When you buy a bond, you are essentially…

Buying ownership in the company

Purchasing physical real estate

What does compound interest mean?

Interest paid only on your original deposit

Earning returns on both principal and accumulated gains

What is an index fund?

A fund that picks stocks to beat the market

A fund that tracks a market index like the S&P 500

What is dollar-cost averaging?

Investing a fixed amount at regular intervals

Buying only when prices hit their lowest

What does a dividend represent?

A penalty for selling your shares

A share of company profits paid to shareholders

What is a bear market?

A market rising strongly over time

A prolonged period of falling prices

A market where no trading happens

Why keep an emergency fund before investing heavily?

So you aren't forced to sell investments to cover surprises

What does an expense ratio measure for a fund?

The fund's guaranteed yearly return

The annual fee charged as a percentage of assets

The number of stocks in the fund

What's Your Investing IQ? Test Your Investment Smarts

Think you know your way around investing? This quick quiz tests your grasp of the core concepts every smart investor relies on — stocks, bonds, compounding, diversification, and risk. 12 multiple-choice questions, each with an explanation so you actually learn as you go.

Educational only — not financial advice.