Saving and Investing

Risky investments

• Are meant to make small returns on investment
• May lead to a larger return on investment
• Are always long-term
• Involve checking accounts

All of these are benefits to high liquidity investments except

• A high rate of return
• Easily accessible 
• Can convert to cash when needed
• Less risky

A mutual fund is 

• An investment in a diversified group of stocks
• The money left over when reinvested into the company
• An account that guarantees a fixed rate of return
• Exclusively for retirement accounts

Which is the least risky?

• Stock
• CD
• Savings account
• Mutual fund

Don't put all your eggs in one basket best refers to which of the following pieces of advice

• Diversify your stock portfolio in order to reduce risk
• Invest in a single stock for the largest gain
• Take out as many loans as you can
• Don't hesitate when buying stocks

Your credit score will be significantly lowered if you

• You miss a loan payment
• Buy a house
• Take out a loan
• Go to college

Your house cost 100,000. You put 20% down. What is your down payment? 

• 10,000
• 20,000
• 100,000
• 120,000

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

The relationship between risk and return can be stated as

• Higher risk indicates higher return

• Higher risk indicates lower return

• Lower risk indicates higher return

• No relationship exists between risk and return