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5.03 The Fundamentals of Investing Note Taking Guide

Total questions: 15

Worksheet time: 8mins

Name
Class
Date
1.

Assets purchased with the goal of providing additional income from the asset itself but with the risk of loss.

a)

Net Worth

b)

Return

c)

Investment

d)

Risk

2.

Why are investments less liquid than savings tools?

a)

Investment are for long term goals.

b)

All investments have some risk .

c)

The danger that money won’t be worth as much in the future as it

d)

They may not easily be converted into cash

3.

Which investment definition deos this refer to: A form of lending to a company or the government.

a)

Bond

b)

Stock

c)

Real Estate

d)

Speculative Investments

4.

Which investment definition deos this refer to: Ownership of residential or commercial property or land.

a)

Bond

b)

Stock

c)

Real Estate

d)

Speculative Investments

5.

Which investment definition deos this refer to: Have the potential for significant fluctuations in return over a short period of time.

a)

Bond

b)

Stock

c)

Real Estate

d)

Speculative Investments

6.

Which investment has types of returns include: Capital gains (selling property for more than what was paid)

a)

Bond

b)

Stock

c)

Real Estate

d)

Speculative Investments

7.

What is the risk level of stocks?

a)

Low

b)

Medium

c)

High

d)

Depnends on the investment

8.

What is the risk level of Speculative Investments?

a)

Low

b)

Medium

c)

High

d)

Depnends on the investment

9.

A mutual fund that was designed to reduce fees by investing in the stocks and bonds that make up an index.

a)

Bond

b)

Stock

c)

Index Fund

d)

Speculative Investments

10.

The investment philosophy may be influenced by...

a)

money

b)

type of investment

c)

stock market

d)

time

11.

Reduces risk by spreading money among a wide array of investments.

a)

Portfolio Diversification

b)

Brokerage Firms

c)

Investment Philosophy

d)

Mutual Funds

12.

Investments have the potential for _________ returns.

a)

lower

b)

higher

c)

greater

d)

basic

13.

Investment are for ______ goals.

a)

short term

b)

mid term

c)

long term

d)

retirement

14.

Total Return divided by Amount of Money Invested =

a)

Rate of Risk

b)

Rate of Return

c)

Risk and Return

d)

Return

15.

Strive to have the rate of return on an investment be ______ than the rate of inflation.

a)

higher than

b)

lower than

c)

better

d)

riskier