EverFi Marketplaces Module 4: Keys to Investing

When would it be a good idea to put your money in a savings account instead of investing it?

• When you won’t need the money for a long time.

• When you’re looking for a large return.

• When you’re looking to maintain the value of your money with a little bit of growth.

• None of the above

When would it be a good idea to invest your money instead of putting it in a savings account?

• When you won’t need the money for a long time.

• When you want to put your money somewhere safe.

• When you’re looking to maintain the value of your money with a little bit of growth.

• None of the above

Which of the following statements is FALSE?

• Investing is best when you’re looking to maintain the value of your money with a little bit of growth.

• You earn interest in a savings account and a return by investing in the stock market.

• Putting your money in a savings account is best if you’ll need to withdraw the money in the near future.

• Investing is riskier than putting your money in a savings account.

Why might an investor want to invest in the stock market?

• Investing in the stock market is a guaranteed way to make money.

• Investing in companies through the stock market offers a chance to share in their profits.

• Investing in the stock market usually offers a higher return than interest earned on a savings account.

• Both B and C

People invest in the stock market because:

• The time value of money states that money available now is worth more than the same amount of money later because of its potential to grow.

• Investing in companies through the stock market offers a chance to share in the profits of those companies.

• Investing in the stock market generally offers a higher return than interest earned on a savings account.

• All of the above

Which of the following is NOT a reason why people invest in the stock market?

• Investing in the stock market usually offers a higher return than the interest earned on a savings account.

• Investing is a guaranteed way to make money.

• Investing in companies through the stock market offers a chance to share in the profits of those companies.

• None of the above

Historically, long-term returns of the stock market have been negative.

• True

• False

Historically, long-term returns of the stock market have been positive.

• True

• False

In the past 90 years, the stock market has had positive returns, averaging 10% annually.

• True

• False

A ______ is a fixed income investment that represents a loan from an investor to a borrower.

• Stock

• Bond

• Cash Equivalent

• Mutual Fund