Investment Goal Setting Quiz: Test Your Financial IQ

📚 Quick Study Guide

• 🎯 Financial Goal: A specific objective you want to achieve with your money.
• ⏱️ Time Horizon: The period over which an investment is expected to perform.
• 💰 Risk Tolerance: Your ability to handle fluctuations in the value of your investments.
• 📊 Asset Allocation: Dividing your investments among different asset categories, such as stocks, bonds, and real estate.
• 📈 Return on Investment (ROI): A measure of the profitability of an investment. Formula: $ROI = \frac{(Gain\ from\ Investment - Cost\ of\ Investment)}{Cost\ of\ Investment}$
• 🧭 Diversification: Spreading investments across different assets to reduce risk.
• 💡 SMART Goals: Specific, Measurable, Achievable, Relevant, and Time-bound.

Practice Quiz

1. What does the 'M' stand for in SMART goals?
   1. A. Manageable
   2. B. Measurable
   3. C. Monetary
   4. D. Motivational
2. Which of the following is NOT typically considered an asset class?
   1. A. Stocks
   2. B. Bonds
   3. C. Real Estate
   4. D. Liabilities
3. What is the primary benefit of diversification in an investment portfolio?
   1. A. Higher returns
   2. B. Reduced risk
   3. C. Guaranteed profits
   4. D. Increased liquidity
4. What does ROI stand for in finance?
   1. A. Rate of Inflation
   2. B. Return on Investment
   3. C. Risk of Investment
   4. D. Revenue on Income
5. Which factor is MOST important when determining your investment time horizon?
   1. A. Current interest rates
   2. B. When you'll need the money
   3. C. The stock market's performance
   4. D. Your age
6. Which of these is the LEAST liquid asset?
   1. A. Stocks
   2. B. Bonds
   3. C. Real Estate
   4. D. Savings Account
7. If an investment of $1,000 yields a gain of $100, what is the ROI?
   1. A. 1%
   2. B. 10%
   3. C. 100%
   4. D. 0.1%