Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

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Question 1 of 10

Investing in the stock market is the quickest way to grow your wealth.

  • A true
  • B false

Explanation

Investments require a long-term commitment of your fundsbecause it generally takes a long time for them to generate significant returns.You should never think of investing as a get-rich-quick scheme.

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Question 2 of 10

You decide that you want to buy a house and you need to save £30,000 for your deposit. You make a once-off deposit of £10,000 into a fundthat grows by 15% each year. Ignoring fees and other charges, how many years would youneed to keep your money in the fund to reach your goal?

  • A Five
  • B Six
  • C Seven
  • D Eight

Explanation

If you calculated an interest growth of 15% each year, it would take eight years for your fund to be worth: £10,000 x (1.158) = £30,590. Remember, it’s 15% of the current value of your account at the end of each year, not only 15% of your initial investment.

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Question 3 of 10

Capital growth is the only way investors can profit from buying stock.

  • A true
  • B false

Explanation

You can also profit from dividends, which some companies payout to investors when they’ve reached or exceeded their profit targets.

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Question 4 of 10

Which of the following assets can you invest in?

  • A ETFs
  • B Gold
  • C Property
  • D All of the above

Explanation

You can invest in all of these assets.

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Question 5 of 10

Which of the following statements are true about investing in shares?

  • A You’ll always make a profit
  • B You could benefit from dividends
  • C It’s riskier than investing in government bonds
  • D B and C

Explanation

Some companies pay dividends to shareholders when they’vemade significant returns. Investing in shares is also riskier than investing ingovernment bonds because there’s no promise that you’ll get back your initialinvestment as you might with bonds. Plus, a share’s value could depreciate overtime, meaning you could lose some of the money you put up – so A is incorrect.

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Question 6 of 10

Which of the following is not a stock exchange:

  • A LSE
  • B NYSE
  • C SEC
  • D NASDAQ

Explanation

The London Stock Exchange (LSE), New York Stock Exchange (NYSE) and National Association of Securities Dealers Automated Quotations (NASDAQ) are all exchanges. The SEC is the Securities and Exchange Commission – a regulatory body that controls the financial services industry in the US.

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Question 7 of 10

What’s the risk of keeping your money in a savings account?

  • A There’s a high risk that you could lose it unexpectedly
  • B Your cash could lose value over time due to inflation
  • C Compounding fees could eat away at your returns
  • D All of the above

Explanation

The interest you earn in a traditional savings account could belower than the rate of inflation. So even though you’re gaining profits, thetrue value of your money could be diminishing over time.

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Question 8 of 10

Match the following stock exchanges to their respective countries:

Clear

Explanation

National Association of Securities Dealers Automated Quotations (NASDAQ) > USA, London Stock Exchange (LSE) > UK, Australian Securities Exchange (ASX) > Australia, Toronto Stock Exchange (TSX) > Canada, Dubai Financial Market (DFM) > UAE

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Question 9 of 10

Which of the following statements are true about government bonds?

Please select all answers that apply
  • They pay out periodic coupons or interest
  • Your investment serves as a loan
  • It gives you a deeper understanding of chart data
  • They’re riskier than shares
  • All of the above

Explanation

Bonds are less risky than shares because, although a return ofyour capital isn’t always guaranteed, they promise to pay back the full amountof your investment after a fixed period. Shares can either appreciate ordepreciate in value by the time you decide to sell them.

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Question 10 of 10

You can invest in an index like the FTSE 100.

  • A true
  • B false

Explanation

Though indirectly, you can invest in a FTSE-tracking ETF that will hold shares in its constituentcompanies.

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.