Basics of Investing for Students

What is the primary goal of investing?

• To spend money quickly

• To grow wealth over time

• To avoid paying taxes

• To keep money under a mattress

Which of the following is a key feature of savings accounts?

• High risk

• FDIC insured up to $250,000

• Requires a minimum investment of $10,000

• No interest earned

If you deposit $1,000 in a savings account with a 1% annual interest rate, how much interest will you earn in 2 years using simple interest?

• $10

• $20

• $30

• $40

Tags

CCSS.7.RP.A.3

What is a characteristic of index funds?

• Actively managed

• High fees

• Provides diversification across many stocks

• Invests in a single stock

Which of the following is true about Certificates of Deposit (CDs)?

• They have variable interest rates

• Money is locked for the CD term

• They are not insured

• They offer no interest

What is a potential risk of investing in individual stocks?

• Guaranteed returns

• Low risk

• High returns with higher risk

• No need for research

What is a key feature of government bonds?

• High risk

• Loans to the government

• No interest payments

• Short-term investment

• 2.50%

• 3.00%

• 3.59%

• 4.00%

What can cause the price of crop commodities to be volatile?

• Fixed interest rates

• Weather, demand, and global events

• Guaranteed supply

• Stable market conditions

How might a drought affect the supply curve of corn?

• Increase supply, decrease price

• Decrease supply, increase price

• No effect on supply or price

• Increase supply, increase price