Investing Basics 1

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

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

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

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

This is considered an IOU and the higher the interest rate on this, the more risky it is

• Bond
• T-bill
• Money market
• Stocks

The chance of loss.

• Stock
• Reward
• Risk
• Real Estate

An investment is:

• A contract between you and your bank for a checking account

• The outlay of funds for income or profit

• Only something that can be done through your 401K

• never a risk

The FDIC insures deposits per depositor up to

• $50,000

• $100,000

• $200,000

• $250,000