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ICE Final REVIEW SPRING 2024

Authored by Lisa Woods

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Used 2+ times

ICE Final REVIEW SPRING 2024
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31 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?

Dining out at local restaurants
Loan payment on a new car
Expenses for new clothes
Postponing a purchase for a big-screen TV

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

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

Investing is always a less risky option than saving
Investing is best for short-term situations like emergency funds; saving is best for the long-term
Investing typically earns between 1-2% while saving generally earns between 5-7%
Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergencies

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why is diversification a recommended investment strategy?

Investing in a diversified portfolio guarantees that you won’t lose money with your investments
If you tell your fund manager to use diversification, they’ll charge you lower fees
Diversifying your portfolio helps reduce risk
If you diversify your portfolio, you will definitely earn a high return

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is a bond different from a stock?

A bond is a loan you give to an organization while a stock is partial ownership in a company
Bonds are typically riskier than stocks but have the potential to earn higher returns
Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations
Bonds are best for earning high returns while stocks are best for providing a stable source of income

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How can someone make money from investing in a stock?

They sell the stock for a lower price than what they bought it for
They receive dividends or they sell the stock at a higher price than what they bought it for
The stock loses value but the overall market experiences a positive return
They sell the stock for the same price they bought it for

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a brokerage account used for?

It’s an online portal that allows you to set up appointments with a fund manager
It’s the account you use to pay any taxes you owe on money you earned on your investments
It’s a type of account used to buy and sell stocks, bonds, and funds
It’s a special type of 401(k) plan that only some employers offer

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Sam is 22, just started his first full-time job, and is selecting his investments through his company's 401(k) plan. Why might a target date fund (TDF) be a good option for Sam?

A TDF is actively managed by a fund manager but comes with low fees
A TDF buys a single stock and bond so that beginner investors can practice day trading
A TDF is insured by the federal government, so Sam's money is protected even if the fund performs poorly
A TDF will automatically adjust his asset allocation based on the retirement year he has chosen

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