Investments

Bobby has money invest in CD's, a Money Market Account, Stock and Mutual Funds. This is considered his:

• spending plan

• prospectus

• portfolio

• investment report

Bonds are:

• methods for businesses to raise fund

• a way for governments to obtain funds by issuing certificates of debt

• investments that companies make to build their portfolios

• all of the above

A strategy of making a variety of investments in order to reduce your exposure to risk is called:

• strategy reduction

• liquidity

• volatility

• diversification

An investment comprised of shares of stock from many companies grouped together into one investment is called:

• money market

• certificate of deposit

• mutual fund

• municipal bond

An investment that is a loan to a company with a predictable rate of return is a:

• money market

• certificate of deposit

• mutual fund

• bond

A savings tool to utilize when you have a large sum of savings you are willing to deposit with the bank for a certain period of time is called:

• money market

• certificate of deposit

• mutual fund

• municipal bond

Earnings on stock that are paid on a periodic basis are called:

• dividends

• commissions

• interest

• par value

What lists investments from the lowest risk to the highest risk in general?

• stocks, bonds, collectibles

• real estate, collectibles, savings

• bonds, mutual funds, stocks

• futures, stocks, CDs

How does investing in the stock market differ from putting money in a savings account at a bank?

• Investing is less risky.

• Historically, savings accounts have enjoyed higher returns than investing.

• You cannot lose money when investing but you can lose money when saving.

• If you need to access your money within the next few months, putting money in a savings account is a better option.

Which of the statements below BEST describes the relationship between risk and return when considering an investment?

• Investors expect to earn lower return when they invest in a risky asset like a startup company.

• Investors expect to earn a higher return when they invest in a low risk asset like a savings account.

• Investors expect to earn a lower return when they invest in a low risk asset like a bond.

• Investors do not expect to earn a return on a high risk investment.