Investing Review 3 Bonds

A bond is

• the same this as a stock.

• a loan.

• a way to make money very quickly.

• the best way for young people to invest for retirement.

The amount of money used to purchase a bond is called

• shares.

• a loan.

• the principal.

• all of these.

The principal is returned to the investor on

• your 65th birthday.

• the day you retire.

• the maturity date.

• when you graduate from college.

Why do many consider investing in bonds to be a safe investment?

• Fixed income over the life of the bond.

• Returns are predictable.

• Returns are stable.

• Fixed income until the investor dies.

Which type of bond is the safest, therefore, lowest return?

• Municipal Bonds

• Corporate Bonds

• US Savings Bonds

• Barry Bonds

Which person is most likely to invest in bonds?

• One who likes high risk so a chance at high rewards.

• One who wants to earn profits quickly.

• One who wants to avoid all risk when investing.

• One who wants low risk and a reliable return.

The amount of time money is loaned out, like with a bond is called

• APY, Annual Percent Yield

• Term

• Principal

• Maturity Date

Who chooses the risk an investor incurs?

• The Stock Market

• Laws of Supply and Demand

• The Stock Broker

• The Investor

Consistently investing small amounts of money over long periods of time is known as:

• The law of averages

• Dollar cost averaging

• Intermittent investing

• All of these

With investing, there is a potential reward for taking on risk. Generally,

• The more risk you take on, the higher the potential reward.

• The greatest reward is obtained by the least amount of risk.

• The risk is never worth the reward.

• There is a linear decay rate between risk and reward.