Investment Strategies and Debt Management

Investment Strategies and Debt Management

Assessment

Interactive Video

Business

9th - 10th Grade

Hard

Created by

Mia Campbell

FREE Resource

The video tutorial discusses the critical interest rate of 7% as a tipping point for deciding whether to pay off debt or invest. If the interest rate on debt is below 7%, it is generally more beneficial to invest in an index fund, such as the S&P 500, which historically grows at an average rate of about 7% when adjusted for inflation. However, if the interest rate exceeds 7%, the cost of debt outpaces potential investment growth. The video emphasizes the importance of considering personal factors, such as proximity to retirement, when making financial decisions.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the interest rate that experts consider as a tipping point for deciding between paying off debt and investing?

8%

7%

5%

6%

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If your debt interest rate is below 7%, what is generally more beneficial according to the video?

Saving in a bank account

Buying real estate

Paying off the debt

Investing in an index fund

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What type of investment fund is mentioned as a good option when the debt interest rate is below 7%?

Index fund

Mutual fund

Bond fund

Hedge fund

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the average growth rate of the S&P 500 when adjusted for inflation?

5%

8%

6%

7%

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens when the debt interest rate exceeds 7%?

The debt interest and investment returns are equal

The debt interest grows slower than investment returns

The debt interest rate becomes irrelevant

The debt interest grows faster than investment returns