Investing Quiz

What is investing?

• Saving money in a bank account

• Spending money on goods and services

• Growing your money over time by putting it to work in financial instruments

• Borrowing money to purchase a home

How does investing differ from saving?

• Investing is less risky than saving

• Investing cannot earn higher returns over the long term

• Investing involves taking on varying amounts of risk for the potential to earn higher returns over the long term

• Investing and saving are the same in terms of risk and potential returns

What is the primary purpose of saving money according to the learning material?

• To put your money to work

• To store money safely for availability when needed

• To grow money over time for potential returns

• To achieve long-term goals

What is investing money primarily for?

• Keeping money without risks

• Short term goals

• Growing money over time for potential returns

• Immediate spending needs

What kind of interest is calculated on the original amount of money plus the accumulated interest of previous periods?

• simple interest

• compound interest

• investment interest

What is the time horizon for short-term goals in saving?

• 1-5 years

• 5-10 years

• 10 years or more

What is the time horizon for mid-term goals in investing?

• Less than a year

• 1-5 years

• 5-10 years

• 10 years or more

What time horizon is associated with long-term goals in investing?

• Less than a year

• 1-5 years

• 5-10 years

• 10 years or more

What type of investment account allows you to take immediate tax deductions from your income and has you pay taxes later upon withdrawal?

• Brokerage Accounts

• Tax Deferred Accounts

• Tax Exempt Accounts

What type of investment account provides future tax benefits rather than tax breaks on contributions since withdrawals at retirement are not subject to taxes?

• Brokerage Accounts

• Tax Deferred Accounts

• Tax Exempt Accounts