Savings and Retirement

Which of the following forms of investment typically carry significant risks of financial loss?

• Bonds

• Stocks

• Savings Accounts

• Certificate of Deposits

Why should an investor maintain a diversified stock portfolio?

• A diversified portfolio ensures a higher rate of return.

• A diversified portfolio reduces the risk of heavy losses.

• A diversified portfolio lowers the costs of completing trades.

• A diversified portfolio increases access to financial information.

What is a bond? 

• a certificate of ownership in a corporation, with the right to a share of the earnings 
• are loans that investors make to corporations and governments

• a payment from an investor to a corporation for the rights to future profits 
• a group of stocks sold together for a set price 

A mutual fund is 

• An investment in a diversified group of stocks
• The money left over when reinvested into the company
• An account that guarantees a fixed rate of return
• Exclusively for retirement accounts

Which is the least risky?

• Stock
• CD
• Savings account
• Mutual fund

Don't put all your eggs in one basket best refers to which of the following pieces of advice

• Diversify your stock portfolio in order to reduce risk
• Invest in a single stock for the largest gain
• Take out as many loans as you can
• Don't hesitate when buying stocks

A simple way to determine how long an investment will take to double given a fixed annual rate of interest.

• Rule of 72

• compound interest

• interest rate

• savings

Most Americans have an emergency fund and money saved for retirement

• True
• False

The power of compound interest works BEST the longer an investment is allowed to grow

• True
• False

What is a good habit to develop as a young adult?

• Attending Parties with Friends

• Saving money with every paycheck

• Borrowing money for emergencies

• Living Paycheck to Paycheck