Investment Basics

Front

What is a savings account primarily used for?

Back

Keeping money safe while earning interest

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)

Front

What is the primary goal of investing in the stock market?

Back

To make a profit through the increase in stock value

Front

What does it mean to diversify your investment portfolio?

Back

To spread your investments across various assets

Front

What is a mutual fund?

Back

A pool of money collected from many investors to invest in securities.

Front

Which of the following is NOT a characteristic of a high-risk investment? High potential returns, Possibility of losing the initial investment, Volatility in value

Back

Guaranteed returns

Front

What is the stock market?

Back

A place where stocks, or shares of ownership in companies, are bought and sold

Front

What does it mean if a stock's value goes up?

Back

The company is likely doing well financially

Front

Why might an investor choose a mutual fund over individual stocks?

Back

Mutual funds are less risky due to diversification.

Front

What is the primary risk of investing in the stock market?

Back

The value of stocks may decrease, leading to potential losses