Investing

Front

Select the best definition of compound interest.

Back

Compound interest is earning interest on the original amount you deposited plus any interest earned.

Front

What is a stock?

Back

A stock is a share of ownership in a company.

Front

What type of market is described by a receding economy and a decline in the stock market?

Back

Bear Market

Front

What is the current trading price of McDonald's stock?

Back

$186.75

Front

Duncan plans to invest all of his money in individual stocks. Why is this likely a bad investment strategy?

Back

Purchasing individual stocks has a high amount of risk and little diversification.

Front

Which statement best describes the risk level of bonds? Options: Bonds are one of the riskiest investment types, but have the potential for a high return. Bonds have a moderate amount of risk, but are a riskier investment when compared to stocks. Bonds have a low to moderate amount of risk and are less risky than stocks. Bonds have no risk.

Back

Bonds have a low to moderate amount of risk and are less risky than stocks.

Front

What is one way you can earn money by investing in bonds?

Back

Through interest collected on your original investment.

Front

What should Dahlia's investor risk level be given that she is 24 years old, makes $85,000 per year, has a fully funded Emergency Fund, and extra income each month?

Back

Aggressive

Front

Which of the following is a characteristic of an index fund? High fees, Insured, Diversified, Professionally managed

Back

Diversified

Front

What type of account should Jamal, who is 14 and has taxable income, open to begin investing?

Back

A custodial Roth IRA