Title: QUIZ: Stock Market Strategies: Are You an Active or Passive Investor? -- Page One Economics®
Course: Kelly's Copying and Exporting Course > Section: Stock Market Strategies: Are You an Active or Passive Investor? -- Page One Economics®

Q: How does the return on stocks compare to other popular investment options such as T-bills and T-bonds?
- Stocks on average have a lower return than both T-bills and T-bonds.
- Stocks on average have a higher return than both T-bills and T-bonds.
- Stocks generally have the same return as both T-bills and T-bonds.
- Stocks generally have higher returns than T-bills and lower returns than T-bonds.
A: Stocks on average have a higher return than both T-bills and T-bonds.

Q: How do investors typically earn money on their stock purchases?
- Through interest payments
- Through rental income
- Through government subsidies
- Through dividends and capital gains
A: Through dividends and capital gains

Q: What is diversification in the context of stock investing?
- Investing in various financial instruments
- Investing in a single stock
- Investing in several companies in the same industry
- Focusing only on large companies
A: Investing in various financial instruments

Q: What is the goal of an index fund?
- To outperform the market consistently
- To invest in a single industry
- To replicate the market
- To provide the highest possible returns
A: To replicate the market

Q: According to the Efficient Market Hypothesis (EMH), why is the stock market considered efficient?
- Because it is always predictable
- Because it reflects all relevant information
- Because it has low returns
- Because it is influenced by market trends
A: Because it reflects all relevant information

Q: What is one advantage of index funds mentioned in the article?
- High transaction costs
- Higher investment costs
- Lower investment costs
- Lack of diversification
A: Lower investment costs

Q: According to the article, what is the primary focus of active management in stock investing?
- Outperforming the stock market
- Building a portfolio to replicate the market
- Minimizing risk through diversification
- Investing in government bonds
A: Outperforming the stock market

Q: Which of the following is true of a passive investment strategy compared with an active management strategy?
- Passive investment strategies consistently outperform the market.
- Active management strategies have lower transaction costs.
- Active management strategies are too risky for investors.
- Passive management strategies are more cost-effective in the long term.
A: Passive management strategies are more cost-effective in the long term.

Q: What financial instrument is designed to provide investors with diversification?
- Government bonds
- Stock options
- Mutual funds
- Real estate
A: Mutual funds

Q: According to the article, what is the key consideration in the choice between investing in an active or passive mutual fund?
- Your belief in an analyst’s ability to consistently beat the market
- Market unpredictability
- The size of the investment portfolio
- Government regulations around the mutual fund
A: Your belief in an analyst’s ability to consistently beat the market