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

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

The possibility of losing all or part of your investment is known as

• asset allocation

• compounding

• return

• risk

Generally, how is risk related to return?

• the lower the risk, the greater the possibility of a high return

• the greater the risk, the greater the possibility of a high return

• the greater the risk, the greater the possibility of a low return

• risk and return have no relationship

A single share of ownership of a company is called a:

• Bond

• Mutual Fund

• Annuity

• Stock

Stocks are low risk investments options.

• True

• False

Leaving your investments in the stock market alone for at least five years is a good way to reduce risk because…

• It allows your investments to earn more interest

• Fees are waived for investments held for over five years

• You get a bonus from the company if you invest for five years

• It keeps you from reacting to dips in the market and selling at too low of a price

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 considered an IOU and the higher the interest rate (or coupon rate) on this, the more risky it is

• Bond

• T-bill

• Money market

• Stocks

Which of the following is a way to start investing?

• Purchase stocks on your own

• Pool money into a mutual fund managed by an advisor

• Purchase part of an index fund

• Hire a financial advisor to make a plan for you

• All options are correct