Investments

Front

Which is true about risk and return? Options: More risk = less possibility to make money, Less Risk = More possibility to make money, More Risk = more possibility to make money, Risk and return are calculated with the rule of 72

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More Risk = more possibility to make money

Front

Rule of 72 is the rule that...

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Calculates how much time it will take to double your money

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A collection of stock bought as a package deal is called a

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Mutual Fund

Front

Investment securities where an investor lends money to a company or government for a set period of time in exchange for regular interest payments.

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Bonds

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The process of spreading your investments around so that your exposure to any one asset is limited.

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Diversification

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The ease to which an asset or security can be converted into ready cash without effecting it’s market price.

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Liquidity

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The risk that your purchasing power will be reduced if the value of your investments does not keep up with inflation.

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Inflation risk

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Stocks are riskier than bonds

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True

Front

You should invest as soon as you can.

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True

Front

interest earned becomes part of the principal and then earns interest itself

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compound interest