Saving and Investing

Front

Which of the following statement is TRUE?
Options:
Savings and investing is only for wealthy people.
Savings and investing is important for people of all income levels.
Savings is only for people with limited income and investing is for people with high levels of income.
Savings is only for people with high levels of income and investing is for people with limited income.

Back

Savings and investing is important for people of all income levels.

Front

If you are planning to put aside money for long-term goals, your BEST option is probably putting your money into a mutual fund because it is diversified.

Back

putting your money into a mutual fund because it is diversified.

Front

Risk is

Back

the potential that you will not get your money back once it is invested.

Front

Low interest rates increase the amount of time needed to double your invested money.

Back

increase the amount of time needed to double your invested money.

Front

Which of the following statements is FALSE? Low interest rates decrease the incentive to save. A savings account is best for meeting short-term goals. It is better to wait until interest rates are high to start saving. Investing tends to have a higher risk than savings, resulting in potentially higher rates of return.

Back

It is better to wait until interest rates are high to start saving.

Front

Deciding whether to save $25 dollars or buy a pair of shoes illustrates

Back

opportunity cost.

Front

Mutual funds

Back

are designed to provide higher rates of return than savings accounts as the money is invested in investments with a low risk.

Front

Which of the following BEST describes diversifying a portfolio? Buying stocks every year in the same company, Buying corporate bonds and stocks in the same company., Buying stocks in several different companies, Putting all of your money in a safe investment.

Back

Buying stocks in several different companies

Front

If you have a low risk tolerance, you should

Back

invest in a mutual fund to spread your risk.

Front

Even though stock purchases have high risk, they are still a good investment to reach long-term goals, they are still a good investment to reach short-term goals, they should be avoided unless you get a guaranteed rate of return, you can still make money if you buy enough of them.

Back

they are still a good investment to reach long-term goals