1. Which of the following best describes a stock's P/E ratio?

• Price ÷ Earnings per share
• Profit ÷ Equity
• Price ÷ Equity
• Earnings ÷ Price

2. What does it mean when a bond is "callable"?

• The bondholder can sell it back at any time
• The issuer can redeem it before maturity
• It can be converted into stock
• It only pays interest if the issuer is called for collection

3. A bear market is generally defined as a decline of at least:

• 5%
• 10%
• 20%
• 50%

4. Which is true of a no-load mutual fund?

• It has no expense ratio
• It charges no sales commission
• It guarantees its returns
• It is unregulated

5. Dollar-cost averaging means:

• Buying only stocks priced under one dollar
• Investing a fixed dollar amount on a regular schedule
• Averaging the cost basis of all shares before selling
• Spreading your wealth across multiple currencies

6. The Dow Jones Industrial Average tracks how many companies?

• 20
• 30
• 100
• 500

7. Which is the safest of these fixed-income investments?

• 30-year US Treasury bond
• AAA-rated corporate bond
• Junk (high-yield) bond
• Foreign emerging-market bond

8. A stock with a beta of 1.5 is expected to:

• Pay a 1.5% dividend
• Trade at 1.5× its book value
• Move 50% more than the market on average
• Have a 1.5× P/E ratio versus its peers

9. An IPO is:

• A bond that pays interest only at maturity
• A private company's first sale of stock to the public
• A loan from a bank to a public company
• An interest-protected option

10. Which is a key advantage of an ETF over a traditional mutual fund?

• ETFs are guaranteed to outperform
• ETFs have no expense ratio
• ETFs trade throughout the day like stocks
• ETFs are exempt from capital-gains taxes