Chapter 19 Savings and Investment Strategies

Which of the following is investing for current income

• family that wants to buy a vacation home

• a retired person who needs to pay living expenses

• student putting away money for college

• a business manager planning for retirement

A person who desires high income from an investment would be most concerned with

• safety

• liquidity

• risk

• return

Investing means using your savings to earn more money.

• True

• False

The more frequently interest is compounded, the slower the growth in savings.

• True

• False

Usually, higher risk investments pay higher yields than lower risk investiments.

• True

• False

Stocks of smaller companies are usualy not traded on a stock exchange.

• True

• False

Most corporate bonds are issued for $10,000.

• True

• False

An investment with an unusually high risk is called a speculative investment.

• True

• False

Before a corporation can by bondholders the rate of interest promised to them, it must first pay dividends to stockholders.

• True

• False

The money you receive for letting others use your money is called

• interest

• premiums

• collateral

• security