Investing basics quiz

A key difference between saving and investing is

• Saving is for everyone, investing is for the wealthy

• Your money is insured when investing, it is not in savings

• Investing has a guaranteed return, savings does not

• Saving is for emergencies & goals, investing is for long-term wealth

Which would be considered the highest risk investment type?

• Stock

• Mutual Fund

• Bond

• Money Market Account

A diversified portfolio is desirable because

• It limits investment choice

• It's a good predictor on rate of return

• It increases risk and return

• It decreases risk

Why is it important to start investing as soon as possible?

• You take less risk when you are young, so money will be safe

• You have more time for your money to compound

• Investing is an easy way to make quick money

• Fees on investments are cheaper when you are younger

—Buying little pieces of a whole lot of different companies

• Stocks
• Bonds 
• Mutual funds
• T-bills

What is a stock?

• A loan an investor makes to a company or government that pays interest over time.
• A share of ownership in a company
• A collection of investments sold as a package.
• An option to purchase something in the future at todays price.

What is the primary reason for a company to issue stock?

• The stocks help investors earn a higher rate of return
• To raise money to grow the company
• To distribute the risk of bankruptcy across more investors
• To increase greater awareness of the company

Employer sponsored retirement savings plan.

• 401K or 403B

• IRA

• Individual Retirement Account

• Roth IRA

This is a type of investment where investors pool their money together to buy stocks, bonds, and other securities 

• Diversification
• Mutual Funds
• Pool Party
• Mutual Diversification Portfolio

This is when a company will pledge to repay a specific amount of money along with interest

• Corporate Bond

• Government Bond

• James Bond

• Savings Bond