Investment Terms

Spreading your investments around to inrease financial security

• Risk assessment
• Diversification
• Stocks, bonds & cash
• Liquidity trap

How quickly and easily an asset can be converted into cash is called...

• Savings
• Investment
• Interest
• Liquidity

The riskier an investment is the more likely it is to have a higher yield (make more money)

• True
• False

Earning interest on initial investment plus any interest earned is called...

• Simple interest
• Compound interest
• Bonus interest
• Time value

Compared to other options, how liquid is a savings account?

• More liquid than cash
• Less liquid than mutual funds
• More liquid than a Certificate of Deposit (CD)
• More liquid than a checking account

How do you "pay yourself first"?

• Write a check
• Put money in savings before paying bills
• Invest money each paycheck
• Be sure bills are paid

The general rise in prices over time is called...

• liquidity
• inflation
• deflation
• market price

Which of the following is true of investments?

• higher risk = lower return
• lower risk = higher return
• higher risk = higher return
• they are a bad idea

Investment taken out of gross income (before taxes) or growing w/o taxes

• Stock
• Bond
• Tax-obligated 
• Tax-deferred

Rule of 72.  How many years to double my money if I get a 9% return on investment? 

• 8 years
• 7.2 year
• 7 years
• 9 years