WorksheetsPF Investing
Total questions: 27
Worksheet time: 14mins
What does diversification mean to investing?
to spread around
don't put all your eggs in one basket
put your money into mutual funds that invest in several different stocks or bonds
all are correct
What is the relationship between risk and return when investing
as the risk goes down, the return goes up
as the risk goes up, the return goes down
as the risk goes up, the return goes up
there is not relationship between risk and return when investing
For the past 10 years what percent of mutual funds have made money?
85%
90%
95%
100%
Investing is for five years or longer, saving is for fewer than five years.
true
false
A major difference in saving and investing is
Saving is important, investing is optional
Investing is important, saving is optional
the amount of money you earn (rate of return)
A share or piece of ownership in a company is a
bond
mutual fund
annuity
stock
Susie wants to save money on her taxes. Should she invest for this reason?
Yes. Savings on taxes is a great reason for investing.
No. Never invest only for tax reasons.
If you invest in mutual funds you are diversifying your investments. Is this a good idea?
Yes. Diversification helps lower risk.
No. You should keep all your investments in one fund because investing always involves risk.
Dave wants to invest in single stocks, is this a good idea?
No, because the risk is too high and the average person doesn't know enough about stocks to directly invest in them and it's too risky.
No, because you cannot buy stocks without putting your money into a mutual fund.
Yes, because stocks are a great investment.
Yes, because stocks have an average return of 12%.
Which answer is true about investments?
Never invest using borrowed money.
Diversification lowers risk.
Never invest for tax reasons only.
All are true.
What is a mutual fund?
A group of people who form a club to buy stocks on their own.
A variable annuity.
A group of people pooling their money to purchase stocks or bonds into a fund that is managed by a broker.
Stocks and bonds.
If you want to invest in an aggressive growth stock, what types of companies tend to be in this category?
Older more established companies
Companies that are younger and growing fast
Overseas or international companies
Companies that pay dividends
Saving or investing? You want to start a college fund for a child that is less than one year old.
saving
investing
Saving or investing? You want to buy a car when you graduate from high school.
saving
investing
You want to open a Roth IRA with your graduation money.
saving
investing
You want to buy a house after you graduate from college in six years.
saving
investing
You want to take a nice vacation in two years.
saving
investing
Never invest using borrowed money.
true
false
Oil and gold are good examples of commodities.
true
false
When investing you should always check the 5-10 year track record.
true
false
Saving is for five years or longer.
true
false
Investing is for 5 or fewer years.
true
false
How quick you can access your money is called
investing
saving
liquidity
commodity
An international growth stock mutual fund has your money invested in what types of companies?
established American companies
younger American companies
blue chip
international
A bond is a debt instrument for a company.
bond
stock
annuity
mutual fund
In a mutual fund, investors pool their money.
true
false
The difference between saving and investing is the amount of interest your earn, the reason you are putting money back, and the amount that is recommended.
True
False
