Unit 9 Common Formative

Front

Diversification is important in investing because…

Back

It helps you to balance your risk across different types of investments.

Front

Which investment is the most risky? Options: bond, stock, mutual fund, savings account

Back

stock

Front

Which type of investment is the least risky? Options: stock, bond, mutual fund, savings account

Back

savings account

Front

What is the difference between a Traditional and Roth IRA?

Back

A traditional IRA's contributions are not taxed until you withdraw them at retirement. A Roth IRA's contributions are taxed when you invest.

Front

The relationship between Risk & Return can be stated as

Back

Higher Risk / Higher Return

Front

Which of the following correctly orders the investments from LOWER risk to HIGHER risk? Treasury bond − Stock − Diversified mutual fund, Stock − Treasury bond − Diversified mutual fund, Treasury bond − Diversified mutual fund – Stock, Diversified mutual fund − Treasury bond − Stock

Back

Treasury bond − Diversified mutual fund – Stock

Front

What are mutual funds?

Back

Pools money together from investors so those investors can buy investments and spread out the risk of investing.

Front

A type of investment sold by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time, called a maturity date.

Back

Certificate of Deposit

Front

Educational Savings account to help save for post secondary education. The majority invests your money in mutual funds. What is this account called?

Back

529 plan

Front

Which retirement plan is offered by a corporation to its employees? 401K, 403B, 457, 757A

Back

401K