Financial Literacy Unit 2: Risk & Reward

Which of the following people should put more money into stocks?

• Sarabi who is young, has a good job, and doesn't plan to retire for another 30+ years.

• Ricky who has two kids starting college next year and he's planning to pay for it with his savings.

• Penny who doesn't have a job at the moment and doesn't have much savings

• Lionel who wants to buy a house within 3 years and expects to have to pay a downpayment

What is one benefit of mutual funds over individual stocks?

• Mutual funds are not invested in the stock market so they are not risky.

• Mutual funds are invested in a variety of stocks and bonds to limit your risk.

• Mutual funds cost less than individual stocks.

• Mutual funds are guaranteed to earn more money that individual stocks.

Which of these types of investment will typically earn the highest return on investment in the long-run?

• Certificates of Deposit

• Bonds

• Stocks

• Savings Accounts

Which of the following represent good investments because they typically appreciate in value over time?

• Cars

• Boats

• Real Estate

• Cell phones

You can start investing with a small amount of money because it's more affordable now than it used to be.

• True

• False

The share of company's earnings/profit paid to shareholders is called a

• loan

• bond premium

• amortization

• dividend

Why is compound interest more advantageous than simple interest?

• It’s more difficult to calculate, so fewer people use compound interest, making more profits for those who do.
• Compound interest accumulates very rapidly, so you only have to save for 3 years or fewer to earn far more money.
• Compound interest is attached to the stocks with the highest risk, so you get the highest interest on them
• In compound interest, you earn interest on not only your principal, but also on the interest you’ve already made.

The chance of loss.

• Stock
• Reward
• Risk
• Real Estate

______ is paid on top interest previously paid

• Sinking fund
• Interest rate 
• Compound interest
• Mortgage 

When you buy a stock, you are buying a small piece of _______ in a company.

• debt
• ownership
• risk

Tags

CCSS.RI.11-12.5

CCSS.RI.6.5

CCSS.RI.7.5

CCSS.RI.8.5

CCSS.RI.9-10.5