Why is compound interest more advantageous than simple interest?

Between cash, stocks, and bonds, bonds are typically considered the riskiest.

Putting money into a savings account with interest is the ideal way for a young adult to invest.

Between cash, stocks, and bonds, cash is typically considered the least risky.

There are investment options even riskier than stocks.

Historically, stocks have had far greater annual returns than cash, government bonds, and savings accounts.

An investor should expect a higher return when investing in stocks compared to the return from a FDIC-insured savings account

Since stocks are generally more risky than bonds, investors should expect to receive LOWER returns from stocks

Investing in riskier assets (e.g., start-up companies) will guarantee a higher return for investors

Investors in bonds can expect to lose money since companies often go bankrupt.

When it comes to investing, risk and return have a direct relationship, in that the riskier an investment, the higher its expected return.

You are guaranteed to lose money when you invest while putting your money in a savings account is risk-free.

If you invest in stocks you are guaranteed a 7-9% return while savings accounts have interest rates of about 1%

Since investing in the stock market carries with it higher risk, it also has a higher expected return than stashing your money in a savings account

The returns you gain from investing in the stock market vary year to year but over the long-term have averaged about 7-9% which is higher than one can expect to earn in a savings account

If you are fearful about losing money you should always put your money in a savings account and never invest

Your risk tolerance for investing should be determined by these factors:

Rank order the following investments from least risky to most risky:

A. Investment in a Corporate Bond (e.g., a bond issued by Wal-Mart),

B. Saving account,

C. Investment in a U.S. Treasury Bond,

D. Investment in a public stock (e.g., stock in the Wal-Mart company)

A risk management technique that mixes a wide variety of investments within a portfolio.

Measures the performance of a basket of securities intended to replicate a certain area of the market, such as the Standard & Poor's 500.

Your ______________ defines the kind of investor you are.

What key factor is the reason young investors have the ability to ride out market ups and downs compared to someone close to retirement?

What is liquidity when dealing with risk appetite.

For a _______________ investor, capital growth is not a priority and they seek stable investments that will gradually grow in value and aren't prone to high volatility.

For a _______________ investor, a more volatile portfolio provides good if not exceptional capital growth over the long term although there will be some market fluctuations, a roller coaster ride is unlikely under normal market conditions.

Investors with a _______________ accept higher volatility in order to maximize capital growth over the long term.

___________ is the rate of return you expect the investment to earn over the time period.

___________ is the measured performance from the investment after one cycle period of time (yearly, semi-annually, quarterly).

___________ is the rate of return you expect the investment to earn over the time period.

The difference between actual and expected returns is

The _________ the standard deviation , the greater the overall risk of the investment.

Your risk appetite should be based on needs, willingness, and _________.

If you willing to take risk (it might cause you big loss), it will give more return, and you are considered a_______ risk-taker.

If you are not willing to take risk and are okay with lower return, then you are a more risk-_______ kind of investor.

Who has higher needs: the person who wants to retire at 40 or the person who wants to retire at 65?

If you have dependents, your ability to take risk is likely to be ________ than someone who does not have a family.

If you have the need and ability to take on risk, but find it unsettling after buying a risky stock, then ________________ is low.

If you have the need and ability to take on risk, but find it unsettling after buying a risky stock, then you may want to consider investments with a _____________ risk profile, like investment grade bonds.

The key to successful investing is the ___________ to stay invested, riding out market fluctuations with investments at your level of risk tolerance.

The key to successful investing is staying invested, riding out market _________ and business cycles.

Ben is 26 and has just gotten a new job at a much higher salary. He is single, has no loans and will get a raise within six months. He wants to invest some of his new-found wealth. His risk tolerance is

John is a single dad with two children, ages 10 and 12. He wants them to go to college and is putting aside money to help pay for their educations. It will be six years before he needs money to help his first child with college. His risk tolerance is

Ty is 62. His health is good. His wife has a low paying job, but their children are grown and off on their own. Ty and his wife will retire in three years. Ty's risk tolerance

Elizabeth is 8. Her mom and dad want to start a small investment portfolio for her to use for college or to help buy a home someday. Liz's risk tolerance is

Sofia and Harrison are in their forties and have three children. They have a mortgage and some credit card bills, but they have put aside a small amount of money to invest for retirement. They hope to retire when they are 65. Their risk tolerance is

Rob is in his forties. He has paid for his home, makes a good salary and has no children. He has a good job and wants to invest money so he can buy a condo at the beach in 10 years. His risk tolerance is

Karleigh is 20. She is almost finished college. Her parents have paid all of her college costs and have promised to buy a small house for her when she graduates and starts her first job. Blair works on the weekends and during the summer; she has saved several hundred dollars, which she wants to invest for graduate school which she plans to apply for in 5-10 years. Her risk tolerance is

Sam works in a fast-food restaurant as a cook. He barely makes enough money to pay the rent and buy groceries for his wife and baby. Sam is 35. His grandmother died and left him $2,000, which Sam wants to invest to build up a safety net fund. Sam’s risk tolerance is

Lisa is 27 and has a good job and few bills. She wants to invest so that in five years she can take a year off to travel in Europe. She has $5,000 to invest and will need $25,000 to take the trip of her dreams. Her risk tolerance is