Careers Unit 4 Investing

a type of income investment is known as...

• asset

• savings account

• stock

• diversification

a type of growth investment is known as...

• compounding

• rate of return

• stock

• windfall

earning interest on previously earned interest plus the principal amount is known as...

• compounding

• dollar cost averaging

• stock

• savings account

spreading your money among different savings and investments is known as...

• compounding

• diversification

• savings account

• stock

a system where the public can buy or sell stock shares

• stock

• savings account

• stock exchange

• asset

something of value that can be changed into cash

• asset

• stock

• dollar cost averaging

• windfall

The time value of money can best be explained using which one of the following concepts?

• a dollar today is worth more than a dollar tomorrow

• take time to "pay yourself first"

• investments increase in risk over time

• compounding increases investments over time

What is the historical long-term annual average rate of inflation?

• 1%

• 3%

• 5%

• 7%

The basic rule of a risk-to-return relationship is that...

• the lower the risk, the higher the return rate

• the higher the risk, the higher the return rate

• the higher the risk, the lower the return rate

• the two issues are not related

Which of the following types of investments potentially has the lowest investment risk while also growing in value?

• collectibles

• real estate

• savings account

• stocks