ML FBLA Financial Literacy - Investing

What is investing?

• Saving money for short-term goals

• Putting money into assets with the goal of making a profit

• Spending money on goods and services

• Lending money to a friend

What is a stock?

• A type of savings account

• A share of ownership in a company

• A government bond

• A loan made to a company

What is a bond?

• A share of ownership in a company

• A debt investment where you lend money to a company or government

• A type of savings account

• A stock that pays dividends

What is a dividend?

• The price at which a stock is bought or sold

• A payment made by a company to shareholders from its profits

• A tax on stocks

• A fee paid to buy bonds

What is a mutual fund?

• A company that lends money to the government

• A pool of money from many investors used to buy stocks, bonds, or other securities

• A type of investment that always loses money

• A savings account with a high interest rate

What does it mean to diversify your investments?

• Invest all your money in one stock

• Spread your investments across different types of assets to reduce risk

• Only invest in bonds

• Invest in a single company for a high return

What is a risk in investing?

• The chance to earn a guaranteed return

• The possibility of losing money or not earning as much as expected

• A reward for investing

• A free bonus from the bank

What is the stock market?

• A place where only bonds are traded

• A government organization that controls money

• A place where stocks and other investments are bought and sold

• A place where only savings accounts are offered

What is a broker?

• A person or firm who buys and sells investments on behalf of clients

• A person who manages a company’s stock

• A company that guarantees your investments will grow

• A government agency that manages taxes

What is the purpose of a 401(k) plan?

• To save for short-term expenses

• To help you save for retirement with tax advantages

• To purchase bonds directly from the government

• To fund a college education