Asset Classes and Sub-Classes Quiz
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Questions and Answers

Which asset classes are commonly split into sub-classes by geography, growth, and size characteristics?

  • Stocks and commodities
  • Bonds and stocks (correct)
  • Stocks and real estate
  • Bonds and commodities
  • What are some common sub-classes for bonds?

  • Collateral and maturity
  • Issuer credit rating and industry
  • Issuer credit rating and maturity (correct)
  • Issuer industry and collateral
  • What are some characteristics that investors often consider when looking at bonds?

  • Geography, growth, and size characteristics
  • Issuer credit rating, maturity, and industry
  • Collateral, callable, and industry of the issuer (correct)
  • Issuer credit rating, maturity, and geography
  • What does the figure below illustrate?

    <p>Sub-classes of bonds by maturity and issuer</p> Signup and view all the answers

    Why is it important to understand different asset classes?

    <p>They are often characterized by similar risk and return</p> Signup and view all the answers

    Which of the following risks is associated with investing in bonds?

    <p>Market risk</p> Signup and view all the answers

    What happens to bond prices when interest rates go up?

    <p>Bond prices go down</p> Signup and view all the answers

    How does inflation affect the purchasing power of fixed interest payments?

    <p>Decreases it</p> Signup and view all the answers

    What is liquidity risk in the context of bond investing?

    <p>The risk of not being able to sell bonds</p> Signup and view all the answers

    Which of the following risks is NOT mentioned in the text?

    <p>Market risk</p> Signup and view all the answers

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