Financial Literacy Unit 4 Investments Review

You have $5,000 and want to double your money in 6 yrs. What rate must your investment earn to achieve $10,000 in the 6 yrs.?

• 10%

• 12%

• 15%

What is inflation?

• spending more money once you start earning more

• rise in prices of goods/services

• no credit card debt

What is lifestyle creep?

• spending more money once you start earning more

• rise in prices of goods/services

• no credit card debt

What are 2 things to consider before investing?

• Money made or lost on an investment

• spending more money once you start earning more

• no credit card debt and having an emergency fund

Define return & risk:

• --Return:  money from your family

  --Risk: fun times

• --Return:  money made or lost on an investment

  --Risk: possibility of negative outcome occurring

• --Return:  taking things back to the store

  --Risk: A board game

What are the 3 risk tolerance factors discussed in class?

• --Time: how long can you be in the market

  --Ability to Endure Price changes: waiting out the market during declines

  ---Ability to Earn Money: can you earn money back that you could lose?

• --Geographical

  ---Sector

  --Size

What is the most prevalent type of stock called?

• Unique Stock

• Common Stock

• Prevelanet Stock

What are the 4 ways to classify stocks?

• -- Gender

  --Geographical

  ---Sector

  --Size

• -- Population

  ---Sector

  --Size

  -- Place Value

• --Geographical

  ---Sector

  --Size

  --Future Growth / Current value

What is a dividend?

• Sum of money paid to shareholders on a yearly basis

• Sum of money paid to shareholders on a quarterly basis

• Sum of money taken away from shareholders on a quarterly basis

If a stock you buy is $75 per share and pays $2 per year in total dividends; what is the dividend yield of the stock?

• 2.67%

• 3.5%

• 75%