Investment and Personal Finance Assessment

As an investor, when you purchase a(n) _______________ from a company, you are lending the company money which it promises to repay with interest by a certain date.

• mutual fund

• stock option

• bond

• dividend

As _______________ increases, the purchasing power of the dollar decreases, which impacts how much you can buy in goods and services.

• deflation

• inflation

• interest rate

• market value

Investors can purchase shares in an actively managed _______________ , which pools money from many people to buy a diversified portfolio of stocks, bonds, or other securities.

• hedge fund

• exchange-traded fund

• stock market

• mutual fund

For someone like Sarah who prefers a hands-off approach to investing, a(n) _______________ can automatically manage her portfolio based on her risk preferences.

• robo-advisor

• stockbroker

• financial planner

• day trader

A retirement savings option that automatically adjusts the asset mix as your retirement date approaches is known as a(n) _______________.

• fixed annuity

• target-date fund

• money market fund

• index fund

Mike uses the strategy of _______________ to minimize the impact of the market's ups and downs. He invests the same amount of money at regular intervals over time.

• market timing

• short selling

• dollar-cost averaging

• day trading

The interest calculated on both the money you've invested and the accumulated interest from previous periods is known as _______________.

• simple interest

• compound interest

• fixed interest

• variable interest

To reduce risk in her investment portfolio, Emily uses the strategy of _______________ , making sure she invests in a variety of assets like stocks, bonds, funds, and more.

• diversification

• speculation

• leveraging

• hedging

In a(n) _______________, employees can contribute a portion of their salary on a pre-tax basis, which is then invested for retirement savings.

• pension plan

• savings account

• 401(k) plan

• money market account

When a company makes a profit, it may choose to pay part of those profits back to its shareholders in the form of a(n) _______________.

• capital gain

• interest payment

• stock split

• dividend