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Test Your Investing IQ

Written by The Content Team | Published on August 24, 2017

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Whether you're a student, a seasoned alumnus or on another path altogether, it's always a good idea to learn — especially when it comes to investing. That's why we've decided to offer up a few questions to expand your investing knowledge. Good luck!

 

1. What is a Bull Market?

  1. A market in which only energy drinks are sold
  2. A place in Spain where the "Running of the Bulls" event is held
  3. A market in which share prices are falling
  4. A market in which share prices are rising

2. Usually, if interest rates go up, then bond prices...

  1. Go down
  2. Go up
  3. Are not affected

3. Which type of investor looks for a combination of income and capital growth?

  1. A balanced investor
  2. An opportunistic investor
  3. A growth investor
  4. All of them. Who isn't looking for a combination of income and capital growth?

4. What does SRI stand for?

  1. Seriously Researched Investments
  2. Socially Responsible Investing
  3. Seriously Responsible Investing 
  4. Socially Researched Investments

5. Which account type doesn't allow you to make contributions?

  1. RESP
  2. RRSP
  3. RRIF
  4. TFSA

6. If a portfolio consisted of only tech stocks it would be considered:

  1. A 2017 plus tech portfolio
  2. Not a diversified portfolio
  3. Doomed to fail
  4. A winner

7. Earnings season is most importantly...

  1. A time for companies to put out press releases
  2. When public companies, usually quarterly, report their financial statements as required by the regulator
  3. An opportunity to see how well your portfolio is performing
  4. A chance to research a company

8. You can only open an RESP for:

  1. Your own children
  2. Your own children or grandchildren
  3. Any child with the parent's permission

9. Choose the closest definition for "Fundamental Analysis."

  1. A method used to determine which investments are important and which are not
  2. A method used to analyze a company's trading history
  3. A method used to understand a company and help determine the value of its stock
  4. A method in which only fundamental companies on a given stock exchange are evaluated

10. Exchange-Traded Funds are traded on a stock exchange.

  1. True
  2. False

11. In the world of finance, what is an investment?

  1. An expensive item
  2. An item you save up for knowing you'll make good use out of it, like a new car
  3. An asset you buy with the goal of seeing it increase in value
  4. A very short-term asset only that guarantees an increase in value

12. What's the maximum lifetime contribution per beneficiary that can be contributed to an RESP?

  1. $50,000
  2. $10,000
  3. $5,000
  4. There is no maximum

13. In order to receive a dividend, you need to:

  1. Be holding the stock on the record date
  2. Buy the stock the day of the ex-dividend date
  3. Buy the stock the day of the record date
  4. Hold a minimum of 100 shares of the stock

14. If you buy a call option...

  1. Sorry, there's no such thing as a call option
  2. You have the obligation to sell the stock at the option's strike price
  3. You have the right but not the obligation to sell the stock at the option's strike price
  4. You have the right but not the obligation to buy the stock at the option's strike price

15. What is a "Black Swan Event"?

  1. An event for when the rare creature becomes extinct
  2. The name of an incredibly well performed ballet
  3. An uncommon and nearly-impossible-to-predict event that has a great impact on the world
  4. The name of a book by financial expert Nassim Nicholas Taleb

Answer Key:

1. d (Explained: Understanding a Bull Market Can Help You Be Bear-Market Ready)

2. a (Explained: Stocks, Bonds & Margin Accounts: What Higher Interest Rates Mean for Investors)

3. a (Explained: A Grilling on Meat Cuts and Investor Styles)

4. b (Explained: A Look at Socially Responsible Investing)

5. c (Explained: Understanding RRIFs)

6. b (Explained: The Benefits of Diversification)

7. b (Explained: Earnings Season 101: What You Need to Know)

8. c (Explained: Understanding RESPs)

9. c (Explained: Spotlight on Research: Fundamental Analysis)

10. a (Explained: What is an ETF?

11. c (Explained: Linking the Lingo of Fashion and Finance)

12. a (Explained: Understanding RESPs)

13. a (Explained: Equity Basics)

14. d (Explained: Understanding Options: The Basics)

15. c

*The title of this article was changed on August 29th from "Quiz: Investing 101."

*This article was updated on February 20, 2020.

This article was featured in our special issue, as seen in the Globe and Mail. Download the full magazine HERE.

 

RBC Direct Investing Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. RBC Direct Investing Inc. does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their own investment decisions. RBC Direct Investing is a business name used by RBC Direct Investing Inc. ® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada. Used under licence. © Royal Bank of Canada 2020. All rights reserved.

The views and opinions expressed in this publication are for your general interest and do not necessarily reflect the views and opinions of RBC Direct Investing. Furthermore, the products, services and securities referred to in this publication are only available in Canada and other jurisdictions where they may be legally offered for sale. If you are not currently resident of Canada, you should not access the information available on the RBC Direct Investing website.

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