Investments Unit 1 Review

What is a Stock Split?

• When a stock drops in value and becomes a fraction of of the price it used to be
• When you only buy a fraction of share of a stock
• When you and your friend buy one stock and you both become half owners of that stock
• A divide that increases the number of shares in a company but decreases the price for one stock

Why should I invest?

• Early retirement
• Build wealth
• Additional income
• All of the above

Investing helps grow your wealth over time through returns like interest, dividends, or capital gains.

• True
• False

What is the difference between investing and trading?

• Trading takes place in a shorter time span than investing
• Trading takes place in a longer time span than investing
• Investing takes place in a shorter time span than investing
• They both take about the same amount of time

What is simple interest?

• an interest charge that borrowers pay lenders for a loan
• The government pays you money
• helps you keep track of your money
• interest you earn on interest.

What is compound interest?

• interest you earn on interest
• helps you keep track of your money
• the goverment pays you money
• an interest charge that lenders pay borrowers for loan

How does interest work for saving compared to investing?

• They both accumulate interest at the same rate
• Saving accumulates more interest
• Usually one gains interest faster than the other, but it's too difficult to predict which will be faster based on the state of the economy
• They both gain interest over time but investing gains it at a more exponential, faster growing rate than saving

What gains the least amount of interest?

• Stocks
• A savings account
• Bonds
• Funds

What percent of 18-29 olds are investing in the market?

• 41%
• 40%
• 50%
• 51%

Jack asks, “What are the latest trends in the stock market?” What is Jack really asking...

• Which companies used to be listed on a particular stock market index?
• How has the stock market performed over the past 5 years?
• What companies are listed on the stock exchange?
• What are the upward and downward patterns of the stock market over a recent period of time?