Basics of Investing for Students

Front

What is the primary goal of investing?

Back

To grow wealth over time.

Front

What is a potential risk of investing in individual stocks?

Back

High returns with higher risk.

Front

True or False: The academic and financial choices you make in the next few years will affect the next 40 years of your life.

Back

True.

Front

What is a key feature of savings accounts?

Back

FDIC insured up to $250,000.

Front

What is a characteristic of index funds?

Back

Provides diversification across many stocks.

Front

What does 'diversification' mean in investing?

Back

Spreading investments across various assets to reduce risk.

Front

What is a stock?

Back

A share in the ownership of a company.

Front

What is a bond?

Back

A loan made to a borrower (typically corporate or governmental) that pays interest over time.

Front

What is compound interest?

Back

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Front

What is the difference between a savings account and a checking account?

Back

A savings account typically earns interest and is used for saving, while a checking account is used for daily transactions.