7.1.1 Investment knowledge quiz

Most people know a little about investing, but they need to know more to be able to manage their investments to meet their goals. Try the quiz below to see if your knowledge is basic or more advanced.

Investing self-quiz

1. What are the three ways of making money from an investment? (required)

2. Jim has a line of credit that charges him four percent per year on $4,000 that he borrowed. Jim can get a guaranteed investment certificate (GIC) that pays four percent interest. He just got a bonus of $2,000 at work. Is he financially better off buying the GIC or paying off half of his line of credit? (Assume that the GIC would be taxable.) (required)

3. About 30 percent of Omar’s pay goes to income taxes and other government deductions. If he borrows $1,000 at five percent interest, roughly how much will he need to earn to pay off the loan in one year? (required)

4. Sarah is 30 years old and has $5,000 to invest for her retirement. She wants to see her retirement savings grow faster and is willing to take risks to do it. Which type of investment is most likely to suit her needs? (required)

5. Generally, the investment that appears to offer the biggest potential return also has: (required)

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