Credit and Investing

Risky investments

• Are meant to make small returns on investment
• May lead to a larger return on investment
• Are always long-term
• Involve checking accounts

Retirement accounts

• Guarantee a specific return on investment
• Are invested in mutual funds or diversified stocks
• Are highly liquid
• Have no penalty for taking out money from them early

A mutual fund is 

• An investment in a diversified group of stocks
• The money left over when reinvested into the company
• An account that guarantees a fixed rate of return
• Exclusively for retirement accounts

Which is the least risky?

• Stock
• CD
• Savings account
• Mutual fund

When you take out a mortgage, what are you putting up as collateral

• Your principal
• Your interest
• Your house
• Your down payment

A low-interest loan that doesn't need to be paid back right away is most likely a

• Mortgage
• Student loan
• Car loan
• Payday loan

Falling behind on loan payments is called

• Defaulting
• Foreclosing
• Borrowing
• Collateral

Your credit score will be significantly lowered if you

• You miss a loan payment
• Buy a house
• Take out a loan
• Go to college

A house cost 500,000. You put 100,000 down and borrow 400,000 at a 30 year 4% fixed interest rate. Which is your principal?

• 600,000
• 500,000
• 400,000
• 100,000

Your house cost 100,000. You put 20% down. What is your down payment? 

• 10,000
• 20,000
• 100,000
• 120,000