Nick is an investor who is worried about how inflation might affect his portfolio. Which statement best describes inflation?

The rise in the overall price level of goods and services

The uncertainty about the return on an investment

The frequency of financial transactions

The projected value of an investment at the end of a specified time frame

What is a mutual fund?

A group of investments sold as a package.

A loan an investor makes to a company or government that pays interest over time.

A share of ownership in a local government.

A group of saving and checking accounts

What is the Dow Jones Industrial Index?

A stock market index based on 30 of the largest companies in the United States.

A statistic that compiles the average industrial output of all North American and European countries.

A stock market index based on 1000 of the largest companies in the world.

The stock market is located in New York City.

A loan an investor makes to a corporation or government that pays interest over time.

A share of ownership in a local government.

A collection of investments sold as a package.

Diversification is important in investing because…

It helps you to balance your risk across different types of investments.

It ensures that you only make low-risk investments.

It increases your overall risk, which could make you more money.

Which statement is true about liquidity?

The more liquid an investment, the less return.

The less liquid the investment, the less return.

The more liquid an investment, the more return.

Miriah's College and Career class has been discussing the importance of understanding liquidity. She is trying to explain the term to another student. Which statement is the most correct description of liquidity?

How quickly and easily an asset can be converted into cash

The amount of savings available

A measurement of how much a person or household owns once all debts have been paid

The amount of money needed to pay for the necessities and comforts currently enjoyed

Which of the following is incorrect about stock market investment?

Investing in stocks guarantees a fixed return.

Investors can buy and sell stocks in the stock market.

The price of a stock is determined by supply and demand in the market.

Investing in stocks can lead to financial loss.

Kate, a federal government worker, is wondering who public pension plans are for. Are they for:

People like her, federal government workers?

Her friend, a railroad employee?

Her uncle, who works at the Veterans Administration?

After you've decided to leave your job at Google after working there 5 years, the most advisable action to take regarding your retirement plan is to ------------------------------ into an Individual Retirement Account (IRA)

Rollover your retirement account

Transfer the funds from your retirement

Maintain your retirement account in a 401(k)

Convert your retirement account

Sheldon works at Quest, a company that offers 401(k) plans as a benefit to employees. What should Sheldon do?

Sheldon should take advantage of the 401(k) plan offered by his company.

Sheldon should save for his children’s college first, then start saving for retirement once they have graduated college.

Sheldon should contribute 1% of his annual income to the 401(k), regardless of how much the employer is willing to match.

Sheldon should start an IRA first, then work towards a 401(k) once he has a nest egg.

Which of the following is NOT a benefit of investing in mutual funds?

They are not strictly regulated and do not require full disclosure.

They offer diversification and thus reduce risk

They have professional management

Provides an investor with limited resources and an entire portfolio of diverse securities

What is the primary reason to issue stock?

To raise money to grow the company

To help investors earn a higher rate of return

To distribute the risk of bankruptcy across more investors

To increase investor awareness of the company

Sara is an investor and she is considering four different portfolios. Which of these portfolios would be considered the highest risk for Sara?

A portfolio made up of 60% stocks, 30% mutual funds, and 10% government bonds.

A portfolio made up of 20% savings accounts, 50% mutual funds, and 30% bonds.

A portfolio made up of 40% mutual funds, 40% government bonds, and 10% stocks.

A portfolio made up of 70% mutual funds, 10% stocks, and 20% government bonds.

Which of the following is generally true about 401(k) and 403(b) retirement plans?

They are plans offered through employers

They restrict when you can withdraw your money

has the highest level of investment risk.

Futures contracts & commodities

Match the following term with the correct statement.

Market condition that occurs when investors are doubtful about the economy and sell stocks

Market condition that occurs when investors are hopeful about the economy and buy stocks

Type of stock that could pay variable dividends and gives owners (stockholders) voting rights

Type of stock that guarantees a fixed dividend but does not provide voting rights

A group of letters standing for a particular stock, mutual fund, or other security

Match the following terms with the correct statement below.

Type of bond issued by states, counties, cities, and towns

Used to judge the risk of buying a bond

Bonds that have high ratings and are considered fairly low-risk

Type of investment that includes rare coins, works of art, antiques, stamps, and other items that appeal to collectors and investors

The buying and selling of securities on the same day, often online, on the basis of small, short-term price fluctuations

Match the following terms with the correct statement.

The typical retirement plan found in most corporations.

The typical retirement plan found in most non profits.

Annual contributions are not tax-deductible, but the earnings are tax-free

An individual’s general approach to investment risk

Invests in securities to match a market index with the goal of having returns similar to those of that index

Label the diagram according to the investment risks and categories.

Bonds, Stocks, ETFs, Real Estate, etc

TEST Saving to Invest, Investing to Retire

Authored by Deanna Roessling

Life Skills

12th Grade

Used 19+ times

TEST Saving to Invest, Investing to Retire

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37 questions

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DROPDOWN QUESTION

1 min • 1 pt

(a) Earnings on a traditional (regular) IRA are tax-exempt.

True

False

DROPDOWN QUESTION

1 min • 1 pt

(a) Never borrow money to invest.

True

False

DROPDOWN QUESTION

1 min • 1 pt

(a) A single stock is the best place to keep your emergency fund.

False

True

DROPDOWN QUESTION

1 min • 1 pt

(a) Individuals with an aggressive investment philosophy are not willing to take on risk for the potential of higher returns.

False

True

DROPDOWN QUESTION

1 min • 1 pt

(a) Stocks are considered a riskier investment than bonds.

True

False

DRAG AND DROP QUESTION

1 min • 1 pt

A (a) is a high risk investment that is banking on someone dying in a certain amount of time

viatical

Annuity

Saving Account

Mutual Fund

REORDER QUESTION

1 min • 1 pt

Based upon risk factors, reorder the following investments from HIGH to LOW risk.

Bonds

Mutual Funds

Collectibles

Stocks

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TEST Saving to Invest, Investing to Retire

(a) Earnings on a traditional (regular) IRA are tax-exempt.

(a) Never borrow money to invest.

(a) A single stock is the best place to keep your emergency fund.

(a) Individuals with an aggressive investment philosophy are not willing to take on risk for the potential of higher returns.

(a) Stocks are considered a riskier investment than bonds.

A (a) is a high risk investment that is banking on someone dying in a certain amount of time

Based upon risk factors, reorder the following investments from HIGH to LOW risk.

The dollar amount that the bondholder will get at the bond’s maturity date called (a) .

As an investor (according to our pyramid), with higher risk comes the potential to (a) .

What is a stock broker?

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TEST Saving to Invest, Investing to Retire

​ ​ (a) Earnings on a traditional (regular) IRA are tax-exempt.

​ (a) Never borrow money to invest.

​ (a) A single stock is the best place to keep your emergency fund.

​ (a) Individuals with an aggressive investment philosophy are not willing to take on risk for the potential of higher returns.

​ (a) Stocks are considered a riskier investment than bonds.

​ A ​ (a) is a high risk investment that is banking on someone dying in a certain amount of time

Based upon risk factors, reorder the following investments from HIGH to LOW risk.

The dollar amount that the bondholder will get at the bond’s maturity date called ​ (a) .

As an investor (according to our pyramid), with higher risk comes the potential to ​ (a) .

What is a stock broker?

Access all questions and much more by creating a free account

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Life Skills

(a) Earnings on a traditional (regular) IRA are tax-exempt.

(a) Never borrow money to invest.

(a) A single stock is the best place to keep your emergency fund.

(a) Individuals with an aggressive investment philosophy are not willing to take on risk for the potential of higher returns.

(a) Stocks are considered a riskier investment than bonds.

A (a) is a high risk investment that is banking on someone dying in a certain amount of time

The dollar amount that the bondholder will get at the bond’s maturity date called (a) .

As an investor (according to our pyramid), with higher risk comes the potential to (a) .