Investing

What are two purposes for investing? (select two)

• growing wealth

• avoiding taxes

• saving for emergencies

• saving for long-term goals

When should you begin investing so that you can take advantage of compound interest?

• as early as possible

• when your career is established

• after making over $100,000

• around age 50

Which term describes how easily you can access the money you have invested?

• Liquidity

• Opportunity Cost

• Inflation

• Diversification

Which term describes how unpredictable and risky an investment might be?

• Liquidity

• Opportunity Cost

• Volatility

• Diversification

An investment in real estate that will be very difficult to sell can be described as _____.

• not liquid

• very liquid

The phrase "don't put all your eggs in one basket" is used to illustrate the importance of _____.

• stock options

• debt repayments

• high-risk investments

• diversifying investments

If Jim invests $500 into stocks that he sells for $1,200, what was the return on his investment?

• $500

• $700

• $1,200

• $1,900

An investment in the partial ownership of a company is called a _____.

• Stock

• Bond

• Mutual Fund

• Money Market

An investment into a professionally managed account with many types of investments owned by several shareholders is called a ______.

• Stock

• Bond

• Mutual Fund

• Money Market

Which of the following investments tends to be the most volatile and risky but offers the possibility of high rates of return?

• Stock

• Bond

• Mutual Fund

• Money Market