Investing

What is NOT an example of a commodity?

• Beef

• Oil

• Wheat

• Labour

Dividends are...

• part of a firm’s profit that is distributed to shareholders

• cost of holding shares in a company

• tax paid on shares held

• a form of superannuation contributions

What is an example of an economic circumstance that impacts business decisions?

• unemployment rate

• purchasing a new house

• loss of job

• having a new baby

What is a defensive asset?

• high-risk, high-return asset

• low-risk, low-return asset

• an asset whose value is shielded from market fluctuations

• an asset used for maximising investment portfolio value

What is an example of diversification?

• investing in high-risk high-return shares

• investing across various asset classes

• investing in different businesses in an industry

• investing in property in different suburbs

What is an example of a low-risk investment option?

• Australian shares

• Overseas shares

• Cryptocurrency

• Commodities

What is usually NOT an essential feature of a blue-chip share?

• strong record of performance and growth

• considered to be a safe investment option

• has a reputation for paying dividends

• has a high share purchase price

A key difference between saving and investing is

• Saving is for everyone, investing is for the wealthy

• Your money is insured when investing, it is not in savings

• Investing has a guaranteed return, savings does not

• Saving is for emergencies & goals, investing is for long-term wealth

The relationship between risk and return can be stated as

• Higher risk indicates higher return

• Higher risk indicates lower return

• Lower risk indicates a safe investment option

• No relationship exists between risk and return

Calculate the rate of return for $6,000 worth of shares sold for $8,000.

• 33%

• 0.333

• 25%

• 0.25