Financial Security and Investing

Speculative Stocks are _____ investments.

• low risk/low return

• medium risk/medium return

• high risk/high return

A U.S. Savings Bond is a _____ investment.

• low risk/low return

• medium risk/medium return

• high risk/high return

Alexis owns 40 shares of ABC stock which she bought for $80 per share. If ABC initiates a stock split, she will now own:

• 1 share at $1

• 800 shares at $400

• 80 shares at $40

• 80 shares at $80

Your financial advisor has suggested that you not "put all of your eggs in one basket" and that you should diversify your portfolio. Which of the following types of investments is the most diversified?

• Buying individual stocks in companies through a broker

• Buying bonds

• Investing money in a mutual fund

• Buying a house and renting it out to tenants

You will receive the greatest gain on your

principal investment if interest is compounded ____.

• Quarterly

• Daily

• Anually

• Semiannually

Money left over after you have paid bills is ____.

• Discretionary income

• Interest

• Principal

• Compound interest

A person wants to invest in a low-risk investment product. Which of the following would be the best investment for her?

• Common stock in a company

• Mutual Fund

• U.S. Treasury Bond

• Speculative Stock

A 25 year old invests $5000 in a long term investment. A 50 year old invests $10,000 in a short term investment. Which of the following is true?

• The 50 year old will become far wealthier

• Neither will become very wealthy

• The 50 year old will be better off financially because they invested more money

• The 25 year old will benefit from the fact that their investment will grow over a long period of time

A stockbroker works for which type of financial institution?

• Savings and Loan

• Credit Union

• Commercial Bank

• Brokerage Firm

The date on which a certificate of deposit is due is called the ____.

• The redemption date

• The maturity date

• The beginning date

• The due date