Investing Review

Asset location means what?

• Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash

• A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash(

• Reinvesting earned interest back into the principal to allow money to grow exponentially over time.

• The practice of investing in a large variety of stocks, bonds, and/or funds as a way to reduce your overall risk.

True or False: Investing in a diversified portfolio of stocks guarantees you will not lose money.

• True

• False

What is NOT true about investing?

• Grow the money/Can be high return

• High risk

• Likely low return

• Exponential growth/compound interest

Which of the following investment types are the least risky (from those shown below)?

• Savings Account

• Real Estate

• Treasury Bonds

• Stock

What is NOT true about savings?

• Slow growth

• Very risky

• Low risk

• Good for emergencies

A key difference between saving and investing is

• Saving is for everyone, investing is for the wealthy

• Investing has a guaranteed return, savings does not

• Your money is insured when investing, it is not in savings

• Saving is for emergencies & goals, investing is for long-term wealth

Generally speaking, the __________ the risk, the _________ the potential return or loss.

• higher; lower

• lower; higher

• higher; higher

• both a and c

Sarah wants to go to spend a month in Asia traveling next summer but doesn't have the money to do so. She is thinking of investing the $1200 she currently has saved in stock in her favorite retail store in hopes of earning more money for the vacation. Why shouldn't she do that?

• investing in one company's stock is quite risky.

• one year probably isn't enough time for one stock to turn $1200 into a month's vacation.

• investing your whole savings in the stock market is a poor financial decision.

• all of these choices are accurate.

You can always profit from stocks by holding the shares of stock for at least 5 years.

• True

• False

________________________ are a mix of stocks and bonds.

• Money Markets

• Mutual Funds

• Securities

• None of the Above.