EverFi Marketplace

How can investors receive compounding returns?

• By diversifying their investment portfolio

• By investing their earnings back into their original investment

• By transferring their earnings into a high-risk investment

If an investment is considered “volatile”, it means...

• the investment will experience rapid growth over time.

• the value of the investment may be hard to predict.

• the investment is high-risk, and its price will increase quickly.

Investors nearing retirement will typically shift their investment portfolios to include ________ risk investments.

• lower

• moderate

• higher

What is a possible reason a company would sell stock?

• A. To hire more people

• B. To expand its business

• C. To develop new technology

• All of the Above

What is the primary reason to issue stock?

• To help investors earn a higher rate of return

• To raise money to grow the company

• To distribute the risk of bankruptcy across more investors

The ____ phase in the business cycle is a period when the level of business activity declines and GDP falls.

• Expansion

• Peak

• Contraction

When you buy a ____ , you are loaning money to an organization.

• Stock
• Bond
• Mutual fund
• Index fund

Which best describes the difference between stocks and bonds?

• Stocks allow investors to share in profits; bonds make investors responsible for company debts.
• Stocks allow investors to own a portion of the company; bonds are loans to the company.
• Stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year.
• Stocks are a more reliable investment; bonds tend to be more volatile.

The ____ phase in the business cycle is a period that marks the end of declining business activity.

• Peak

• Expansionary

• Trough

Which of the following is generally true about 401(k) and 403(b) retirement plans?

• They are plans offered through employers.
• They offer some tax benefits.
• They restrict when you can withdraw your money.
• All of the above