Module 5: Investing and Saving Flashcard

Front

What is the main difference between saving and investing?

Back

Saving is for short-term goals, while investing is for long-term goals.

Front

What is the biggest benefit of investing for a long time? Options: You can earn more money by taking more risks., You can get free money from the government., You can earn more money from compound interest., You can avoid paying taxes on your investments.

Back

You can earn more money from compound interest.

Front

Why is investing in stocks considered risky?

Back

Stocks can lose value if the company you invested in does poorly.

Front

What is the main reason why it is important to invest for a long time?

Back

You can earn more money from compound interest.

Front

What is one way to reduce risk when investing? Options: Investing in only one company., Investing in many different things., Investing in things that are very risky., Investing in things that are very safe.

Back

Investing in many different things.

Front

What is an example of a low-risk investment? Options: Buying stocks in a company., Putting money in a savings account., Investing in a new business., Buying a house.

Back

Putting money in a savings account.

Front

What is the relationship between risk and return in investing?

Back

The higher the risk, the higher the return.

Front

What is the main difference between investing and trading?

Back

Trading is more active than investing.

Front

How often do investors check their portfolios?

Back

Only occasionally.

Front

What is the main difference between an investor and a trader?

Back

A trader buys and sells stocks more often than an investor.