Investments 7.1 handout

If you need money for short term expenses or emergencies, make sure you have a/an

• savings account

• investment plan

Which of the following is NOT an example of an investment?

• money market accounts

• stocks

• bonds

• property

This type of account will have an average annual return of 0-2%.

• savings

• investments

Which type of plan will give an investor more money over time?

• savings plan

• investment plan

The reason long-term investments help investors earn more money is because of

• simple interest

• compound interest

The relationship between risk and return are:

• high risk can lead to high returns

• low risk can lead to high returns

• there is no risk in investments

When investing returns can be

• varied from year to year

• are stable from year to year

A loan made to a large organization like a government or corporation. It pays interest to the holder and can be bought and sold.

• bond

• mutual fund

• stock

• index fund

This is a fund that may own multiple assets, and it is managed by a professional investor.

• bond

• mutual fund

• stock

• index fund

Each share represents the fractional ownership of a company.

• bond

• mutual fund

• stock

• index fund