Financial Math: Investing and Retirement

Match the following:

• Bank Accounts

• A type of savings account that usually earns higher interest than a regular savings account, but requires you to leave your money untouched for a set period.

• Certificate of Deposits

• A safe place to store your money, and you can often earn a small amount of interest.

• Bonds

• A pool of money from many investors that is used to buy a diverse mix of stocks, bonds, or other investments.

• Mutual Funds

• Lending money to a company or government, who promises to pay you back with interest.

• Stocks

• Buying shares in a company, making you a part-owner. You can make money if the company's value goes up, but you can also lose money if the company's value goes down.

Match the following:

• risk

• refers to how easily you can access your money

• time horizon

• is the amount of money you gain or lose on your investment

• liquidity

• is how long you plan to keep your money invested or saved

• return

• is the potential for your money to lose value

Don't put all your money into one type of investment. Instead, spread it across different types of assets to reduce risk.

Which answer best describes this scenario?

​ (a)  

• diversify your investments
• create a budget
• set clear goals
• establish an emergency fund
• review and adjust

Track your income and expenses to see how much money you can set aside for saving and investing.

Which answer best describes this scenario?

​ (a)  

• diversify your investments
• create a budget
• set clear goals
• establish an emergency fund
• review and adjust

Save at least three to six months' worth of living expenses in a bank account for emergencies.

Which answer best describes this scenario?

​ (a)  

• diversify your investments
• create a budget
• set clear goals
• establish an emergency fund
• review and adjust

Determine your short-term and long-term financial goals and decide whether saving or investing is the best way to achieve them.

Which answer best describes this scenario?

​ (a)  

• diversify your investments
• create a budget
• set clear goals
• establish an emergency fund
• review and adjust

Check your progress regularly, and adjust your saving and investing strategies as needed.

Which answer best describes this scenario?

​ (a)  

• diversify your investments
• create a budget
• set clear goals
• establish an emergency fund
• review and adjust

Match the following:

• Credit Unions

• They offer investment advice and help clients manage their portfolios to grow wealth over time.

• Brokerage Firms and Investment Co.

• They provide insurance products to protect individuals and businesses from financial loss.

• Insurance Companies

• They are member-owned and you typically have to qualify to become a member. They usually offer better interest rates on savings and lower interest rates on loans.

• Financial Advisers

• They facilitate the buying and selling of stocks, bonds, and other securities for clients.

• Banks

• They provide loans and credit cards to help people finance large purchases, like homes and cars.

Financial markets are places where different types of things (like stocks, bonds, or commodities) are

traded.

Which market offers bonds for trade?

• Commodity market
• Bond market
• Stock market
• Forex market

Financial institutions and markets are key parts of our society. They play a role in helping us save, invest, and borrow money.

What do financial markets do?

• Financial markets only provide loans to businesses.
• Financial markets are solely responsible for government taxation.
• Financial markets focus exclusively on real estate transactions.
• Financial markets offer a place for people to buy and sell stocks and bonds.