Fund quiz 3, 10 questions about investing your Permanent Fund

The information to help you answer these questions can be found on apfc.org or in An Alaskan's Guide to the Permanent Fund (pdf).

1. What is an asset class?

A A university course about assets
B A category of investment
C A very large sum of money

2. A fiduciary is

A A person or company holding assets in trust for a beneficiary
B A company engaged in making loans to businesses and/or individuals
C A high-speed, computerized communications network used for investing

3. What is a stock?

A Ownership in a corporation, represented by one or more shares
B A loan to a government or business
C A piece of property and all the physical property related to it

4. What is a bond?

A A certificate that proves ownership of commercial or retail property
B An "IOU" that states how and when a borrower will pay back a lender
C An official document stating number of shares owned

5. What is real estate?
A A palatial manor inhabited by a very wealthy individual or individuals
B Any piece of property and the physical property related to it
C Only property that is owned by a business or government

6. What is a security?

A Evidence of debt or ownership
B A general term referring to conventional stock, bond and real estate investments
C Documentation signifying ownership in a corporation or a creditor relationship with a corporation or government, or rights to ownership
D All of the above

7. What investment strategy helps to protect an investor from volatility?

A Hedging
B Diversification
C A bull market

8. What investment guideline does the Permanent Board of Trustees follow?

A Keep "all your eggs in one basket"
B 100% high risk, high returns
C The Prudent Investor Rule

9. What does the Prudent Investor Rule state?

A Fiduciaries may invest only in a restricted list of securities, called the "legal list"
B Stocks are the superior investment over the long run
C A fiduciary must act with discretion and intelligence, seek reasonable income, preserve principal and avoid speculative investments

10. What is the profit from an investment, expressed as a percentage of the amount invested called?

A Dividend
B Interest rate
C Rate of return