WISE Review: Investing

David is considering investing his savings. What is the primary purpose of investing?

• To decrease assets and wealth

• To increase assets and wealth

• To maintain current financial status

• To reduce financial risks

Jackson and Henry are looking to invest their savings. Which financial institutions should they consider?

• Retail stores and supermarkets

• Brokerage firms and investment banks

• Hospitals and clinics

• Schools and universities

What is a key characteristic of stocks?

• They are risk-free investments

• They have the highest growth and risk potential

• They are only available to government employees

• They are guaranteed to provide returns

Ethan is considering investing in the stock market. What does his risk tolerance determine?

• The type of investor and investment choices

• The color of the stock market

• The number of shares available

• The location of the investment bank

What is the difference between a broker and a financial planner?

• Brokers charge no commission

• Brokers focus on buying and selling securities

• Financial planners only work with real estate

• Financial planners are not involved in investments

Emma recently sold some shares of stock she owned. What is the formula for calculating her capital gains or losses from this sale?

• (purchase price - selling price) x (shares of stock)

• (selling price - purchase price) x (shares of stock)

• (selling price + purchase price) x (shares of stock)

• (purchase price + selling price) x (shares of stock)

Which of the following is a factor that influences stock prices?

• Weather conditions

• News and economy

• Personal opinions

• Local events

Rohan recently invested in a company and is curious about the benefits of holding its stock. What is one purpose of dividends on stock?

• To decrease stock value

• To declare bankruptcy

• To provide income to investors

• To increase stock volume

Which classification of stocks is known for paying dividends?

• Blue chip stocks

• Growth stocks

• Speculative stocks

• Penny stocks

What is one reason investors purchase mutual funds?

• High risk

• Diversification

• Lack of management

• High fees