Investing Assessment

What is savings?

• a portion of income not spent on current expenditures

• a portion of each paycheck that is used to proivde public goods & services

• money spent on necessary items only

• money spent on wanted items only

To be considedred financially secure, it is recommended that a person have how much money in savings?

• at least 3 months' worht of expenses

• at least 6 months' worth of expenses

• no more than 6 months' worth of expenses

• it is not necessary to have saving to be considred financialy secure.

Which of the following depository institution accounts has the potential to earn the most interest?

• Savings account

• Certificate of Deposit

• Money market deposit account

• All accounts at depository institutions earn the same amount of interest

What is the pay yourself first strategy?

• A strategy that helps a person take advantage of high interest rates when saving money

• A strategy that requires a person to give up one thing for another

• A strategy that recommends a person set aside a portion of money for saving each time money is received  

• A strategy for developing goals  

1. How can compounding increase your investment’s growth?

• 1. By reducing the risk of investing

• 1. By reinvesting your earnings to gain additional returns

• 1. By increasing the impact of inflation over time

• 1. By investing in different assets to diversify your portfolio

Tags

CCSS.HSF.LE.A.2

CCSS.HSF.LE.A.3

CCSS.HSF.LE.A.1

2. What statement accurately describes the historical trends of the stock market since its inception?

• 1. The value has increased constantly and slowly since the stock market opened

• 1. The value has gone up and down a lot, but overall has increased over time

• 1. The value increased a lot in its early days, but has since stayed relatively constant

• 1. The value has gone up and down a lot, but overall has decreased over time

3. If the one-day performance of Super Duper Stock shows a -11.4% return, what can you assume about the longer-term historical performance of their stock?

• 1. Super Duper has likely been struggling financially for months or even years

• 1. Share prices for Super Duper fluctuate regularly and and only high risk investors should have this company anywhere in their portfolio

• 1. One-day returns are far too short a time frame to make any assessment about past or future performance of Super Duper

• 1. Historically, Super Duper must have been much more successful or their shares wouldn’t even be eligible to trade on the stock market

4. If you want to maximize your investment returns, which of these suggestions would be the WORST advice?

• 1. Make frequent trades and withdraw your short-term earnings

• 1. Start to invest early for the long-term

• 1. Reinvest earnings

• 1. Use diversification and allocation to minimize risk

5. How does a bond differ from a stock in your investment portfolio?

• 1. Bonds typically have higher returns and lower risk than stocks

• 1. Bonds typically have higher returns and higher risk than stocks

• 1. Bonds typically have lower returns and higher risk than stocks

• 1. Bonds typically have lower returns and lower risk than stocks

Tags

CCSS.HSS.MD.B.5

CCSS.HSS.MD.A.3

6. When it comes to investing in the stock market, which of the following statements is TRUE?

• 1. There is little to no risk to investing in the stock market

• 1. It is easy to make money by timing the market to buy/sell stocks

• 1. The whole stock market value can go up even if some stock values go down

• 1. It is better to wait until retirement age to begin investing in the stock market

Tags

CCSS.HSS.IC.A.1

CCSS.HSS.IC.B.4