Mr. Lee The Fundamentals of Investing

Which of the following is a trade-off in investing?

• Lower returns with lower risk

• Higher returns with higher risk

• Guaranteed returns with no risk

• No returns with no risk

Fill in the blank: Investment tools are ________ assets.

• Monetary

• Investment

• Tangible

• Liquid

Investing is associated with ______ risk.

• Limited

• Higher

• No

• Moderate

Saving is typically for ______.

• Long-term goals

• Emergencies

• Net worth

• Higher returns (8-12%)

If an investment has a Total Return of 500 and the amount of money invested is 2500, what is the Rate of Return?

• 10%

• 15%

• 20%

• 25%

What is the definition of inflation?

• Decrease in the general level of prices

• Rise in the general level of prices

• Stability in the general level of prices

• None of the above.

The danger that money won’t be worth as much in the future as it is today is known as ______ risk.

• A) Inflation

• B) Deflation

• C) Investment

• D) None

Which of the following is a potential return from real estate?

• Dividends

• Capital gains

• Interest

• Depreciation

If the market price drops significantly, what might happen to your investment?

• gain

• lose

• double

• maintain

Why would you invest in a mutual fund?

• To increase risk

• To reduce risk

• To maintain risk

• To ignore risk