How many questions are in this quiz?

This quiz has 139 questions covering key risk-and-return trade-offs in investing.

No. Each question has 4 options and there’s no timer, so you can answer at your own pace.

Can I choose the number of questions and difficulty?

Yes. You can select your preferred question count and difficulty before starting; the overall quiz is Mixed.

What topics does it focus on?

You’ll practice expected return, volatility, diversification, correlation, risk premiums, and matching risk to time horizon.

What’s a common mistake this quiz targets?

A big one is thinking diversification guarantees profits or removes all risk; the questions clarify what it can and can’t do.

Risk & Return: Core Trade-offs Quiz

About this quiz

What you’ll learn in this quiz

Understanding the risk–return relationship is essential for building portfolios that match your goals and comfort level. This quiz focuses on the core trade-offs: higher expected return usually comes with higher uncertainty, and diversification can change risk without guaranteeing higher returns.

Each question is multiple-choice with 4 options and there’s no timer, so you can slow down and think through volatility, correlation, and expected outcomes. Before you start, pick how many questions you want to answer and select a difficulty level; the overall set is Mixed to keep practice realistic.

Skills you’ll practice

Comparing expected return vs volatility and identifying when “safer” isn’t truly low-risk
Recognizing the role of diversification and correlation in reducing portfolio risk
Distinguishing systematic vs unsystematic risk and what can (and can’t) be diversified away
Interpreting common measures like variance/standard deviation and risk premium in plain language
Matching investments to time horizon, goals, and risk tolerance

Common pitfalls (and how this quiz helps)

Many learners assume the highest return option is always “best,” or that diversification eliminates losses entirely. Another frequent mistake is confusing short-term volatility with long-term risk, especially when time horizon and liquidity needs aren’t considered.

To keep things fair, difficulty is balanced across fundamentals and scenario questions: easier items reinforce definitions and relationships, while tougher ones test judgment under uncertainty. Mixing difficulty also helps you spot weak areas without getting stuck in one narrow topic.