Unit 3 Test Investing

Front

A key difference between saving and investing is

Back

Saving is for emergencies & goals, investing is for long-term wealth

Front

Why is compound interest more beneficial than simple interest?

Back

Your money grows faster when it is compounded

Front

Which would be considered the highest risk investment type? Options: Stock, Mutual Fund, Bond, Money Market Account

Back

Stock

Front

The relationship between risk and return can be stated as

Back

Higher risk indicates higher return

Front

If Jonathan is earning 2% on an investment and inflation is increasing by 3%, what is happening to his purchasing power?

Back

It's decreasing

Front

How can you make money on stocks? Options: Buy them when the price is high and sell when the price is low, Interest, Dividends

Back

Dividends

Front

If interest rates rise, what will typically happen to bond prices?

Back

Fall

Front

A _____ is a loan given to an organization while a _______ is partial ownership in the company.

Back

bond, stock

Front

What's the main difference between a Roth IRA and a Traditional IRA?

Back

Roth IRAs have you pay taxes upfront.

Front

Andy bought 5 shares of a company for $10. Later, he sold all 5 shares for $15. What was his profit/loss on the stock?

Back

Profit of $25