Section 2.04

  Investors take a risk for the potential of receiving _________________________.

What is one advantage of a money market account over a savings account?

• lower tax rates

• higher account security

• ability to write checks

What is NOT a purpose of a risk pyramid?

• to show the levels of risk for different types of investments

• compares one investment to another

• gives investment tips

Is an ownership investment high or low risk investment?

• high

• low

What is NOT a depreciation of an investment?

• decrease in monetary value of an asset

• increase in monetary value of an asset

Which of the following is the definition of securities in investment?

• A financial instrument that can be traded between parties

• a sum of money that is borrowed

• A place for a customer to deposit funds

What is the definition of a certificate of deposit?

• Type of savings account offered by banks and credit unions

• A financial instrument that can be traded between parties

• type of credit vehicle in which a sum of money is lent to another party

When do you have to pay a penalty when you have a certificate of deposit?

• When you deposit over the limit

• When you withdraw money too early

• When you withdraw too much money out at once

Which of the following is an example of a lending investment?

• Bonds

• Mutual funds

• Real estate

• Stocks

What is one negative aspect of owning stocks?

• High risk

• High interest rates

• Low profit margins