SLO Junior High School 9th and 10th Grades

Front

What is a stock?

Back

Ownership in a company

Answer explanation

A stock represents a share of ownership in a company, giving shareholders a claim on part of the company's assets and earnings. This distinguishes it from loans, bonds, or physical commodities like gold or silver.

Front

What is diversification in investing?

Back

Spreading investments across assets

Answer explanation

Diversification in investing means spreading investments across different types of assets to reduce risk. This approach contrasts with buying only technology stocks or investing all money in one company.

Front

What is a dividend?

Back

Money a company pays to shareholders

Answer explanation

A dividend is money a company pays to its shareholders as a reward for their investment. This distinguishes it from fees or loans, making the correct choice the one that defines dividends accurately.

Front

Which is a fixed expense? Options: Movie tickets, Monthly rent, Birthday gifts, Vending machine snacks

Back

Monthly rent

Answer explanation

A fixed expense is a cost that does not change from month to month. The monthly rent payment is a fixed expense because it remains constant, unlike movie tickets, birthday gifts, or snacks, which vary in cost.

Front

What is the purpose of a budget?

Back

To plan and track spending and saving

Answer explanation

The main purpose of a budget is to track and plan spending and saving, helping individuals manage their finances effectively. This ensures that money is allocated wisely rather than spent impulsively.

Front

What is interest?

Back

The cost of borrowing or reward for saving

Answer explanation

Interest is defined as the cost of borrowing money or the reward for saving it. It represents the compensation lenders receive for providing funds and the benefit savers earn for keeping their money in a bank.

Front

What is compound interest?

Back

Interest on principal and previous interest

Answer explanation

Compound interest is calculated on the initial principal and also on the accumulated interest from previous periods, making it more beneficial over time compared to simple interest, which is only on the principal.

Front

What is NYSE?

Back

New York Stock Exchange

Answer explanation

The NYSE stands for the New York Stock Exchange, which is a major stock exchange where securities are bought and sold. It is not a savings account, government agency, or a type of bond.

Front

What is a broker?

Back

Helps people buy and sell stocks

Answer explanation

A broker is someone who facilitates the buying and selling of stocks for clients, making the correct choice 'Someone who helps people buy and sell stocks'. The other options do not accurately describe a broker's role.

Front

What is net worth?

Back

Total assets minus total debts

Answer explanation

Net worth is calculated by subtracting total debts from total assets. This means it reflects your overall financial position, making 'Total assets minus total debts' the correct definition.