Unit 9 (Investments) Test Review

Front

Investment where investors pool their money together to buy stock, bond, and other securities

Back

Mutual Fund

Front

Spreading your assets among several different types of investments

Back

Diversification

Front

The potential for loss when investing

Back

Risk

Front

Employer sponsored retirement savings plan funded by a portion of your salary

Back

401k

Front

Why might someone choose a Traditional IRA over a Roth IRA?

Back

They expect to be in a lower tax bracket in retirement.

Front

Which of the statements below BEST describes the relationship between risk and return when considering an investment? Investors expect to earn a lower return when they invest in a high risk asset, Investors expect to earn a higher return when they invest in a low risk asset, Investors expect to earn a higher return when they invest in a high risk asset, Investors expect to earn zero return when investing in a low risk asset

Back

Investors expect to earn a higher return when they invest in a high risk asset

Front

Why is diversification a recommended investment strategy?

Back

Diversifying your portfolio helps reduce risk

Front

How does inflation impact the money in your savings account?

Back

The purchasing power of your money decreases over time

Front

What characterizes bonds compared to stocks?

Back

A form of lending to the issuer

Front

Which type of savings account typically offers the highest interest rate? Options: Basic savings account, Certificate of Deposit (CD), Checking account, Money market account

Back

Certificate of Deposit (CD)

Tags

DOK Level 1: Recall