Questions on building wealth over years: choosing growth or value, buying an index, investing on a schedule, living on dividends and spreading risk.
Test yourself
One question from each lesson in this topic. Pick an answer to see why, then open the lesson if you want to review it.
Question 1 of 12
Using PEG = P/E ÷ growth rate, which company in the drawing has the lowest PEG, the least paid per point of growth?
Question 2 of 12
In the drawing, the funnel ends with "watchlist, not a buy list". What still has to happen before any buy?
Question 3 of 12
In the drawing, the growth panel carries a P/E 45 tag and the value panel a P/E 12 tag. What does the higher P/E mainly tell you?
Question 4 of 12
Hypothetical Company D makes steel: its profits jump when the economy booms and shrink in recessions. Which box in the drawing describes it?
Question 5 of 12
In the drawing, the dashed line is an estimate of intrinsic value. Where does a Buffett-style investor buy?
Question 6 of 12
All four hypothetical funds in the drawing track the S&P 500 in the same way. All else equal, which one leaves the most for its investors over the years?
Question 7 of 12
The same $600 is invested on each of four dates. In which hypothetical price path does dollar-cost averaging buy the most shares in total?
Question 8 of 12
Each line in the drawing shows $10,000 over 30 years. Which one grows at a steady compounded rate?
Question 9 of 12
Three hypothetical balances start from the same amount and run for 20 years. Which line shows compound growth?
Question 10 of 12
Each card shows a hypothetical stock’s share price, annual dividend per share and EPS. Which company pays out more than it earns?
Question 11 of 12
In the drawing, each circle is one stock, its color is its sector, and each square is a bond fund. Which hypothetical portfolio is spread across the most companies, sectors and asset types?
Question 12 of 12
All four hypothetical companies in the drawing have a permissible core business. Using the limits shown (interest-bearing debt and deposits each below 30% of market cap, non-permissible income below 5% of revenue), which one passes the ratio screen?
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