Investing

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

Which would be considered the highest risk investment type?

• Stock

• Mutual Fund

• Bond

• Money Market Account

The relationship between risk and return can be stated as

• Higher risk indicates higher return

• Higher risk indicates lower return

• Lower risk indicates higher return

• No relationship exists between risk and return

Andy bought 5 shares of a company for $10. Later, he sold all 5 shares for $15. What was his profit/loss on the stock?

• Profit of $5

• Loss of $5

• Profit of $25

• Loss of $25

A diversified portfolio is desirable because

• It limits investment choice

• It's a good predictor on rate of return

• It increases risk and return

• It decreases risk

Why is it important to start investing as soon as possible?

• You take less risk when you are young, so money will be safe

• You have more time for your money to compound

• Investing is an easy way to make quick money

• Fees on investments are cheaper when you are younger

What is inflation?

• The rise in general level of prices

• The uncertainty the return on an investment will deviate from expected

• The number of times something happens to money

• The projected value of an investment at the end of a specified period of time.

A financial plan wold not be complete without both savings and investments

• True

• False

With some investments, you may have to wait a long time to access funds.

• True

• False

Which has the potential to earn higher returns?

• Savings

• Investing