Per 6 (H) - Quiz - Understanding Investments

What percentage of Bob’s paycheck does he plan to spend on rent and utilities?

• 20%

• 30%

• 50%

Why is Bob concerned about keeping his money in a bank account?

• The bank charges high fees.

• He might lose money due to inflation.

• The bank offers no interest.

Which of the following investments is considered the safest according to the video?

• Stocks

• Commercial Real Estate

• Bonds

What is the average annual return on stocks in the United States mentioned in the video?

• 5%

• 7%

• 9%

What is the term used to describe earning money on both your principal and profit?

• Compounding

• Diversification

• Appreciation

What are the three major ways Bob can invest his money?

• Savings account, real estate, and gold

• Cryptocurrency, bonds, and mutual funds

• Real estate, stocks, and savings account

What is a key advantage of using robo-advisors according to the video?

• They guarantee high returns

• They cost less without sacrificing performance

• They are only available to high net-worth investors

What is the primary reason robo-advisors invest in ETFs?

• To match the stock market and diversify investments

• To focus on high-risk investments

• To invest in real estate

What should Bob do before starting to invest, according to the guidelines?

• Invest all his money immediately

• Ensure he has high-interest debt

• Establish a financial foundation and save six months of living expenses

• Only invest in high-risk stocks

What is the recommended approach to investing a fixed percentage of Bob’s paycheck?

• Invest sporadically based on market conditions

• Invest a fixed percentage monthly and forget about it

• Only invest when the market is doing well