Investing

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

Tags

CCSS.L.11-12.4C

CCSS.L.6.4C

CCSS.L.7.4C

CCSS.L.8.4C

CCSS.L.9-10.4C

Why is compound interest more beneficial than simple interest?

• Your money grows faster when it is compounded

• You earn interest on your original deposit only

• Fees for compound interest are greater than simple interest

• Compound interest is hard to calculate, so fewer use it

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

Which is an example of a stock market index?

• New York Stock Exchange

• Mutual Fund

• S&P 500

• Roth IRA

How can you make money on stocks?

• Sell the stock for a lower price than you bought it.

• Interest

• Dividends

• Holding the stock at least 3 years

What is one advantage of starting to invest as early as possible?

• You're eligible for higher interest rates the younger you are.

• You'll get a discount on any fees for funds you invest in.

• Your money has more time to grow.

• You have access to more funds.

A savings account is useful for all of the following purposes EXCEPT...

• Building an emergency fund

• Putting aside money for retirement

• Funding a future vacation

• Saving for a new car

Which of the following is TRUE about owning a share of stock?

• the value of a share is based on the number of investors in a company

• Companies lose money every time someone buys a share

• Owning a share means you own a percentage of the company

• You have to return the share after 5 years or pay a penalty

Which statement is true about bonds?

• The company that issued the bond will pay a dividend to the bondholder each year

• Bonds are a high risk investment

• Bonds are a loan to a company in exchange for an interest payment each year

• Bonds represent part ownership in a company